20200731am CommitteeWhole n1

British Columbia — Debates (Hansard)

Fifth Session, 41st Parliament REPORT OF PROCEEDINGS (HANSARD) COMMITTEE OF THE WHOLE Virtual Meeting Friday, July 31, 2020 Morning Meeting Issue No. 1 Presiding Officer: SPENCER CHANDRA HERBERT, DEPUTY CHAIR, COMMITTEE OF THE WHOLE

PROVINCE OF BRITISH COLUMBIA (Entered Confederation July 20, 1871) LIEUTENANT-GOVERNOR Her Honour the Honourable Janet Austin, OBC Fifth Session, 41st Parliament SPEAKER OF THE LEGISLATIVE ASSEMBLY Honourable Darryl Plecas EXECUTIVE COUNCIL Premier and President of the Executive Council ............................................................................................................... Hon. John Horgan Deputy Premier and Minister of Finance............................................................................................................................Hon.

Carole James Minister of Advanced Education, Skills and Training..................................................................................................... Hon. Melanie Mark Minister of Agriculture.........................................................................................................................................................Hon. Lana Popham Attorney General.................................................................................................................................................................Hon.

David Eby, QC Minister of Children and Family Development ............................................................................................................ Hon. Katrine Conroy Minister of State for Child Care...................................................................................................................................... Hon. Katrina Chen Minister of Citizens’ Services...................................................................................................................................................Hon.

Anne Kang Minister of Education ............................................................................................................................................................ Hon. Rob Fleming Minister of Energy, Mines and Petroleum Resources ..................................................................................................... Hon. Bruce Ralston Minister of Environment and Climate Change Strategy............................................................................................. Hon.

George Heyman Minister of Forests, Lands, Natural Resource Operations and Rural Development ..............................................Hon. Doug Donaldson Minister of Health .....................................................................................................................................................................Hon. Adrian Dix Minister of Indigenous Relations and Reconciliation ......................................................................................................... Hon.

Scott Fraser Minister of Jobs, Economic Development and Competitiveness.............................................................................Hon. Michelle Mungall Minister of State for Trade...............................................................................................................................................Hon. George Chow Minister of Labour ...................................................................................................................................................................Hon.

Harry Bains Minister of Mental Health and Addictions............................................................................................................................ Hon. Judy Darcy Minister of Municipal Affairs and Housing.................................................................................................................. Hon. Selina Robinson Minister of Public Safety and Solicitor General ........................................................................................................... Hon.

Mike Farnworth Minister of Social Development and Poverty Reduction..............................................................................................Hon. Shane Simpson Minister of Tourism, Arts and Culture.....................................................................................................................................Hon. Lisa Beare Minister of Transportation and Infrastructure................................................................................................................ Hon.

Claire Trevena LEGISLATIVE ASSEMBLY Leader of the Official Opposition................................................................................................................................Andrew Wilkinson, QC Leader of the Third Party .................................................................................................................................................................Adam Olsen Deputy Speaker................................................................................................................................................................................

Raj Chouhan Assistant Deputy Speaker............................................................................................................................................................. Simon Gibson Deputy Chair, Committee of the Whole ................................................................................................................ Spencer Chandra Herbert Clerk of the Legislative Assembly ...........................................................................................................................................

Kate Ryan-Lloyd Law Clerk and Parliamentary Counsel.............................................................................................................................. Seunghee Suzie Seo Clerk Assistant, Parliamentary Services...........................................................................................................................

Artour Sogomonian Clerk Assistant, Committees and Interparliamentary Relations ..............................................................................................Susan Sourial Senior Research Analyst ................................................................................................................................................................. Jennifer Arril Senior Research Analyst ...................................................................................................................................................................

Karan Riarh Acting Sergeant-at-Arms..................................................................................................................................................................Greg Nelson

ALPHABETICAL LIST OF MEMBERS Ashton, Dan (BC Liberal) ......................................................................... Penticton Bains, Hon. Harry (NDP)................................................................ Surrey-Newton Barnett, Donna (BC Liberal) .....................................................Cariboo-Chilcotin Beare, Hon. Lisa (NDP)..............................................

Maple Ridge–Pitt Meadows Begg, Garry (NDP) .......................................................................Surrey-Guildford Bernier, Mike (BC Liberal) .........................................................Peace River South Bond, Shirley (BC Liberal)...........................................Prince George–Valemount Brar, Jagrup (NDP).......................................................................Surrey-Fleetwood Cadieux, Stephanie (BC Liberal)........................................................

Surrey South Chandra Herbert, Spencer (NDP) .......................................Vancouver–West End Chen, Hon. Katrina (NDP)...................................................... Burnaby-Lougheed Chouhan, Raj (NDP) .................................................................Burnaby-Edmonds Chow, Hon. George (NDP).................................................Vancouver-Fraserview Clovechok, Doug (BC Liberal) ..................................Columbia River–Revelstoke Coleman, Rich (BC Liberal) ................................................................ Langley East Conroy, Hon.

Katrine (NDP)...........................................................Kootenay West Darcy, Hon. Judy (NDP) ............................................................. New Westminster Davies, Dan (BC Liberal) ........................................................... Peace River North de Jong, Michael, QC (BC Liberal) ..............................................Abbotsford West Dean, Mitzi (NDP)................................................................ Esquimalt-Metchosin D’Eith, Bob (NDP) ................................................................Maple Ridge–Mission Dix, Hon.

Adrian (NDP)....................................................... Vancouver-Kingsway Donaldson, Hon. Doug (NDP)...................................................................... Stikine Eby, Hon. David, QC (NDP).............................................. Vancouver–Point Grey Elmore, Mable (NDP).........................................................Vancouver-Kensington Farnworth, Hon. Mike (NDP) ........................................................Port Coquitlam Fleming, Hon. Rob (NDP) ......................................................

Victoria–Swan Lake Foster, Eric (BC Liberal).............................................................Vernon-Monashee Fraser, Hon. Scott (NDP) ..................................................Mid Island–Pacific Rim Furstenau, Sonia (BC Green Party) .............................................Cowichan Valley Gibson, Simon (BC Liberal) ...................................................Abbotsford-Mission Glumac, Rick (NDP).........................................................Port Moody–Coquitlam Heyman, Hon. George (NDP) ................................................Vancouver-Fairview Horgan, Hon.

John (NDP) ................................................ Langford–Juan de Fuca Hunt, Marvin (BC Liberal) ........................................................ Surrey-Cloverdale Isaacs, Joan (BC Liberal) .......................................... Coquitlam–Burke Mountain James, Hon. Carole (NDP).................................................... Victoria–Beacon Hill Johal, Jas (BC Liberal).................................................Richmond-Queensborough Kahlon, Ravi (NDP)............................................................................... Delta North Kang, Hon.

Anne (NDP)......................................................... Burnaby–Deer Lake Kyllo, Greg (BC Liberal)..............................................................................Shuswap Larson, Linda (BC Liberal) .............................................. Boundary-Similkameen Lee, Michael (BC Liberal) ........................................................Vancouver-Langara Leonard, Ronna-Rae (NDP) ..................................................... Courtenay-Comox Letnick, Norm (BC Liberal).............................................

Kelowna–Lake Country Ma, Bowinn (NDP) .....................................................North Vancouver–Lonsdale Malcolmson, Sheila (NDP) ........................................................................Nanaimo Mark, Hon. Melanie (NDP) .......................................Vancouver–Mount Pleasant Martin, John (BC Liberal)....................................................................... Chilliwack Milobar, Peter (BC Liberal)..................................... Kamloops–North Thompson Morris, Mike (BC Liberal) ........................................... Prince George–Mackenzie Mungall, Hon.

Michelle (NDP)......................................................Nelson-Creston Oakes, Coralee (BC Liberal) ............................................................ Cariboo North Olsen, Adam (BC Green Party)............................ Saanich North and the Islands Paton, Ian (BC Liberal).......................................................................... Delta South Plecas, Hon. Darryl (Ind.) ........................................................... Abbotsford South Polak, Mary (BC Liberal) ............................................................................. Langley Popham, Hon.

Lana (NDP)............................................................... Saanich South Ralston, Hon. Bruce (NDP) ............................................................Surrey-Whalley Redies, Tracy (BC Liberal) .......................................................Surrey–White Rock Reid, Linda (BC Liberal) ................................................. Richmond South Centre Rice, Jennifer (NDP) ............................................................................. North Coast Robinson, Hon.

Selina (NDP) .........................................Coquitlam-Maillardville Ross, Ellis (BC Liberal)................................................................................... Skeena Routledge, Janet (NDP) ....................................................................Burnaby North Routley, Doug (NDP) ................................................. Nanaimo–North Cowichan Rustad, John (BC Liberal) ................................................................Nechako Lakes Shypitka, Tom (BC Liberal) ..............................................................

Kootenay East Simons, Nicholas (NDP) ......................................... Powell River–Sunshine Coast Simpson, Hon. Shane (NDP)..................................................Vancouver-Hastings Sims, Jinny (NDP) ........................................................................ Surrey-Panorama Singh, Rachna (NDP) .........................................................Surrey–Green Timbers Stewart, Ben (BC Liberal) ................................................................. Kelowna West Stilwell, Michelle (BC Liberal)...............................................

Parksville-Qualicum Stone, Todd (BC Liberal)..........................................Kamloops–South Thompson Sturdy, Jordan (BC Liberal)........................................ West Vancouver–Sea to Sky Sullivan, Sam (BC Liberal)................................................ Vancouver–False Creek Sultan, Ralph (BC Liberal) ...........................................West Vancouver–Capilano Tegart, Jackie (BC Liberal) ................................................................. Fraser-Nicola Thomson, Steve (BC Liberal)......................................................

Kelowna-Mission Thornthwaite, Jane (BC Liberal) ...............................North Vancouver–Seymour Throness, Laurie (BC Liberal) .......................................................Chilliwack-Kent Trevena, Hon. Claire (NDP) ................................................................North Island Wat, Teresa (BC Liberal) ................................................. Richmond North Centre Weaver, Dr.

Andrew (Ind.)................................................Oak Bay–Gordon Head Wilkinson, Andrew, QC (BC Liberal) ................................Vancouver-Quilchena Y ap, John (BC Liberal)............................................................Richmond-Steveston LIST OF MEMBERS BY RIDING Abbotsford-Mission............................................................................Simon Gibson Abbotsford South....................................................................... Hon. Darryl Plecas Abbotsford West......................................................................

Michael de Jong, QC Boundary-Similkameen...................................................................... Linda Larson Burnaby–Deer Lake....................................................................... Hon. Anne Kang Burnaby-Edmonds................................................................................Raj Chouhan Burnaby-Lougheed .................................................................... Hon. Katrina Chen Burnaby North .................................................................................

Janet Routledge Cariboo-Chilcotin .............................................................................Donna Barnett Cariboo North.................................................................................... Coralee Oakes Chilliwack ............................................................................................... John Martin Chilliwack-Kent ...............................................................................Laurie Throness Columbia River–Revelstoke .........................................................

Doug Clovechok Coquitlam–Burke Mountain.................................................................. Joan Isaacs Coquitlam-Maillardville ...................................................... Hon. Selina Robinson Courtenay-Comox................................................................... Ronna-Rae Leonard Cowichan Valley .............................................................................

Sonia Furstenau Delta North.............................................................................................Ravi Kahlon Delta South ..................................................................................................Ian Paton Esquimalt-Metchosin ..............................................................................Mitzi Dean Fraser-Nicola .........................................................................................

Jackie Tegart Kamloops–North Thompson .............................................................Peter Milobar Kamloops–South Thompson..................................................................Todd Stone Kelowna–Lake Country .....................................................................Norm Letnick Kelowna-Mission ..............................................................................

Steve Thomson Kelowna West ..........................................................................................Ben Stewart Kootenay East.......................................................................................Tom Shypitka Kootenay West........................................................................ Hon. Katrine Conroy Langford–Juan de Fuca .............................................................. Hon. John Horgan Langley .....................................................................................................

Mary Polak Langley East.........................................................................................Rich Coleman Maple Ridge–Mission.............................................................................. Bob D’Eith Maple Ridge–Pitt Meadows............................................................Hon. Lisa Beare Mid Island–Pacific Rim................................................................ Hon. Scott Fraser Nanaimo......................................................................................

Sheila Malcolmson Nanaimo–North Cowichan............................................................... Doug Routley Nechako Lakes........................................................................................ John Rustad Nelson-Creston ................................................................... Hon. Michelle Mungall New Westminster........................................................................... Hon. Judy Darcy North Coast ...........................................................................................

Jennifer Rice North Island.............................................................................. Hon. Claire Trevena North Vancouver–Lonsdale................................................................... Bowinn Ma North Vancouver–Seymour........................................................Jane Thornthwaite Oak Bay–Gordon Head............................................................Dr.

Andrew Weaver Parksville-Qualicum.......................................................................Michelle Stilwell Peace River North ................................................................................... Dan Davies Peace River South ................................................................................ Mike Bernier Penticton ................................................................................................. Dan Ashton Port Coquitlam...................................................................... Hon.

Mike Farnworth Port Moody–Coquitlam.......................................................................Rick Glumac Powell River–Sunshine Coast....................................................... Nicholas Simons Prince George–Mackenzie....................................................................Mike Morris Prince George–Valemount ..................................................................

Shirley Bond Richmond North Centre..........................................................................Teresa Wat Richmond-Queensborough.........................................................................Jas Johal Richmond South Centre ......................................................................... Linda Reid Richmond-Steveston ...................................................................................

John Y ap Saanich North and the Islands .............................................................Adam Olsen Saanich South .............................................................................Hon. Lana Popham Shuswap...................................................................................................... Greg Kyllo Skeena........................................................................................................... Ellis Ross Stikine....................................................................................Hon.

Doug Donaldson Surrey-Cloverdale ................................................................................ Marvin Hunt Surrey-Fleetwood.....................................................................................Jagrup Brar Surrey–Green Timbers........................................................................Rachna Singh Surrey-Guildford......................................................................................Garry Begg Surrey-Newton ..............................................................................Hon.

Harry Bains Surrey-Panorama ...................................................................................... Jinny Sims Surrey South ................................................................................ Stephanie Cadieux Surrey-Whalley ......................................................................... Hon. Bruce Ralston Surrey–White Rock .............................................................................. Tracy Redies Vancouver-Fairview.............................................................. Hon.

George Heyman Vancouver–False Creek........................................................................ Sam Sullivan Vancouver-Fraserview...............................................................Hon. George Chow Vancouver-Hastings ............................................................... Hon. Shane Simpson Vancouver-Kensington....................................................................... Mable Elmore Vancouver-Kingsway..................................................................... Hon.

Adrian Dix Vancouver-Langara................................................................................ Michael Lee Vancouver–Mount Pleasant..................................................... Hon. Melanie Mark Vancouver–Point Grey ............................................................Hon.

David Eby, QC Vancouver-Quilchena........................................................Andrew Wilkinson, QC Vancouver–West End .....................................................Spencer Chandra Herbert Vernon-Monashee ....................................................................................Eric Foster Victoria–Beacon Hill.................................................................. Hon. Carole James Victoria–Swan Lake.................................................................... Hon. Rob Fleming West Vancouver–Capilano...................................................................

Ralph Sultan West Vancouver–Sea to Sky................................................................Jordan Sturdy Party Standings: BC Liberal 42; NDP 41; Independent 2; BC Green Party 2

CONTENTS Friday, July 31, 2020 Morning Meeting Page Committee of the Whole...............................................................................................................................................................1 Bill 23 — Workers Compensation Amendment Act, 2020(continued) J. Martin Hon. H. Bains M. Lee

FRIDAY , JULY 31, 2020 The committee met at 9:32 a.m. [S. Chandra Herbert in the chair.] Committee of the Whole BILL 23 — WORKERS COMPENSATION AMENDMENT ACT, 2020 (continued)

Section 16 approved. On

section 17. J. Martin: Chair, good morning to yourself and to everybody else joining us at this particular point in time. On

section 17, the return of the dual-pension system, has the minister calculated the costs of increasing WCB assessments? [9:35 a.m.] Hon. H. Bains:Good morning to everyone. Member, overall, Bill 23 does not have a significant cost that will materially affect the accident fund. While the pro- posed amendment will create some incremental increase in the annual cost, we anticipate that WorkSafeBC will remain in a position to keep the average premium base rates stable. To specifically answer your question, there will be a one-time impact of this particular proposal.

That is estim- ated to be a $50 million increased liability on the accident fund. That is one time. Then the annual cost impact has been estimated to be $4.5 million. As I said, WorkSafeBC expects that they will be able to manage this over the smoothing of the rate, and it will not impact the employer’s premium. J. Martin:Given the times that we’re in, with the pan- demic, what considerations were there to postpone adding any additional costs whatsoever to the employer? Hon. H.

Bains:Y es, of course we looked at the times we are going through — also considering that it has been 20 years since any increase to the benefit to workers has taken place. There were three reports that were commissioned by the board and by the Attorney General. One was the Parr report, which was a final report combining all those reports and doing the consultation. [9:40 a.m.] Y es, his report came to us before COVID. The package that he recommended, after consultation, was much, much richer. It would have cost a lot more money to the accident fund and potentially would have raised the premium for the employers.

That’s why, considering the times that we’re going through, we took very a measured approach, a very modest package that we are moving with. This package itself has a modest cost to it. But I’m advised, and my expectation is, that for the next couple of years, at least, the premiums for the employers will not rise as a result of this package. So I think it’s a right approach. It’s a measured approach. It’s a modest package that we are moving forward. The workers have been complaining.

I’m sure every member that is watching right now or is present has seen those complaints and has heard those complaints from those workers about WorkSafeBC. They have told us that the system isn’t fair for them, the system isn’t working for them and how the system is letting them down. Many stor- ies about suicide because they were so frustrated with the system. All those stories are there. That’s why we took a package that is very, very modest. Also, the expectation is that it will not raise the premiums for the employers for at least a couple of years. J.

Martin:Is it the intention of your ministry to re- address assessments beyond two years? Hon. H. Bains:Member, the ministry does not do the assessment when it comes to determining the premium for the employers. It’s the WCB board that will determine that. They do it on an annual basis, and they look at a number of different factors. As you well know, there is a healthy surplus, a position that they’ve been in for the last number of years for reas- ons of a good economy and a lot more premiums coming in as a result of that, and a good return on their invest- ments.

They were in good shape, and they continue to be in good shape. So they will determine the premiums. And as a result, in the past years, the premiums have been subsidized because of a good, healthy surplus sit- ting in the accident fund. Y ou probably know that the cost of claims is $1.68 per hundred payroll. But the employers, this year, are paying $1.55. My expectation is that they’ll continue to pay $1.55 for a couple of years and that this package will not cause the rise in those premiums. J. Martin: The minister has said that the costs of changes will be smoothed out over the next two years.

I gather that the terminology is intended to be reassuring. Can the minister operationalize that for us? What does “smoothed out” actually mean? [9:45 a.m.] Hon. H. Bains: Member, it’s a quite complicated and complex system that the board uses to, what they call, smooth rates. It’s averaged over five years to avoid the shock of rate increases year over year. But it’s a five-year. I can also tell you that WorkSafe’s long-term planning, 1

including the setting of assessment rates, is based on a smoothed approach to financial situations and projections, meaning that significant investment gains or losses are generally taken into account over a period of years rather than having the immediate impact that the fair-value fin- ancial statements might suggest. This is demonstrated in the publication of WorkSafeBC smoothed and funded level in the organization’s annual report. That’s the way it is worked out.

My expectation is that, as a part of this package, and them using smoothed aver- age five years, this package will not impact the premium for employers at least for a couple of years — this year, next year or the year 2022. J. Martin:What impact, though, might this have on the accident fund? Hon. H. Bains: I think we canvassed this before, but here it is. There’s a $27 million one-time cost to the accident fund and about $14 million on an ongoing annual basis.

Again, through smoothing out of the rates and the healthy pos- ition of the accident fund, my expectation is, and that’s what the board’s expectation is, that they will be able to maintain the current rates that the employer enjoys, and $1.55 will continue. J. Martin:Given the extraordinary times we’re in right now, why was there not consideration to revisit the five- year formula and maybe do the adjustment more toward the back end when employers have had an opportunity, hopefully, to recover? Hon. H. Bains: Member, those are vested exclusively with the board.

They’re the one that has a duty to man- age the accident fund as best as they can and what they are expected to under the act and under fiduciary responsibility that they carry with it. Therefore, they look at the investment return. They look at the premium income coming, and I think that’s how they look at and smooth the average over five years to avoid the shock from year to year. Like I said, for the first couple of years — this year, next year and the year 2022 — the board’s expectation is that the premiums will continue as they are today. [9:50 a.m.] J.

Martin:What is the makeup of the one-time $50 mil- lion cost that the minister indicated? Hon. H. Bains: The one-time cost is…. As you full well know, claims can reopen from time to time for a variety of reasons. When the claim is reopened, when they do the recalculation of benefits, then a new rule could apply. That’s why this $15 million — 15, one-five, million — is a one-time cost. On an ongoing basis, there will be a $4.5 million cost. I also must say that Jeff Parr, when he consulted stake- holders, found out that the threshold for when the loss- of-earnings method is applied has actually declined over time.

The threshold has declined. The result is that an increasing number of loss-of-earning awards are already being issued. He estimates that these changes will result in about 25 percent more LOE awards going forward. That’s why the one-time cost of $15 million and $4.5 million annually going forward. J.

Martin:In the 2002 Alan Winter report, it says: “The growth in the number of pension awards, but more strik- ingly the growth of the pension reserve for both LOE and functional awards, is of particular concern for the long- term viability of the system. ” Does the minister feel that the long-term viability of WorkSafeBC is safe, given the changes in this section? [9:55 a.m.] Hon. H. Bains:The short answer is no. The cost is only $4.5 million going forward. Y ou talk about Alan Winter, the quotes back in 2002. Y ou may also remember that there was one person hired to rewrite the WCB without any consultation.

That’s what took place at that time. Again, there may be some reasons. I’m not going to dump over anybody here, but I mean, that is a fact. Y ou talked about it, Member, and others have talked about the lack of consultation. We have consulted widely. All four of those reports that I mentioned consulted widely. Jeff Parr put them together and consulted again. He came back with a package that was much richer. It would have cost a lot more, especially to the premiums. I will tell you…. He was looking at the financial situ- ation of the board at that time, which wasn’t all that great. A number of measures were taken.

The pensions used to be lifetime at that time, not for 65. Again, loss of earnings was considered. The higher of the two were considered, as is this particular

section we are talking about. He looked at all of that and how much savings they could come up with, and they did. I can tell you, going back to, I would say, 2006 or 2007, that WorkSafeBC’s fin- ancial situation has been very good. As a result of that, the good return, the good economy, even under the previous government, the premiums for the employers were kept low. Actually, they were subsidized. The financial situation of the board improved, and the employer benefited from that, which I don’t begrudge. That is the right thing to do in order to keep the economy going.

At the same time, workers did not see any benefit coming out of the good financial situation that the board was in. The employer has enjoyed to the tune of over $1.6 billion in subsidies coming from the accident fund, but the workers did not get any benefit improvement. 2 Committee of the Whole Friday, July 31, 2020

I think that’s why…. The situation that we are in right now is very healthy — the accident fund the WCB is enjoy- ing right now and low employer premiums. This is a mod- est approach to give workers, as well, an important benefit improvement and to protect their health and safety, as part of Bill 23. J. Martin:For the $50 million one-time expenditure, how many claims are expected to be reopened to get to that figure? Hon. H. Bains:No one will ever know how many claims will reopen year to year, Member. It depends.

As I have said, the one-time cost of possibly reopening certain claims is $15 million, but I could give you numbers. [10:00 a.m.] In 2019, 971 loss of earnings awards were issued, and they’re expecting that the increase will be 25 percent more LOE awards. They have costed out a one-time cost of about $15 million, and ongoing costs for the future would be $4.5 million. That’s going on year to year. Also, when you calculate that into the premiums of the employer — if it were to pass on to the employer — it’s 4/ 10 of a cent. That’s how much this particular

section will cost. As I said, the board is smoothing out a process over five years. They expect that the premiums for employers — subsidized premiums, I might add — that they’re enjoying right now will continue this year, next year and the year 2022, at least. J. Martin:In 1990, LOE pensions accounted for roughly 10 percent of total awards and 44 percent of pension reserves. However, under the dual system, it grew to 17 percent of awards and 62 percent of total pension reserves, outgrowing all other liabilities.

What is the minister doing to ensure the long-term viability of WorkSafeBC beyond the one or two years the minister claims that costs will be under control? Hon. H. Bains:As I’ve said a number of times before, it’s a very modest package. The board has calculated that it is manageable within their accident fund — the healthy accident fund that they’re enjoying right now. Also, their expectation is that the employers’ premiums will not be impacted for this year, next year or the year 2022 and that it has a very small impact on the accident fund going forward.

The cost, as I’ve said, is a one-time cost of $27 million, and the ongoing cost is $14 million. We are talking about a fund that is sitting around $19 bil- lion, $20 billion. J. Martin:In our capacity as members of the Legislative Assembly — I’m sure I can speak for all 87 of us — some of the most difficult and frustrating files that come into our constituency offices are with respect to WorkSafeBC. How is this particular

section in the amendment legisla- tion going to help to address that? Hon. H. Bains:Member, I think that’s a very good ques- tion. Although, like I said, these are modest changes in the package that we’re talking about, they are important. Some of the heart-wrenching stories that we hear in our offices come as a result of injured workers’ experience with Work- Safe. They believe that they have been let down. [10:05 a.m.] I’ll give you an example.

The 1917 historic compromise talks about workers giving up their right to sue when they are injured at the workplace or become sick at the work- place, which benefits employers. It’s long-term liability. In return, employers agreed to a no-fault system that they would fund to ensure that the workers’ health and safety are protected at workplaces and that, when they are injured, they will be looked after, whether it’s medical sup- port that they need or rehab provisions for return to work. Now, when you look at the historic compromise, the workers were promised that they would not lose out from this system.

Right now the system is that if you are injured, you get 90 percent of your net income. So you’re losing 10 percent to begin with when you’re injured. That is not keeping up with that compromise, a promise that was made. Now, we’re not touching that, because it’s costly. Then you talk about loss of earnings. When you are per- manently or partially injured, a permanent partial disab- ility award is calculated. Somebody makes a decision on what your likely loss is versus what your real loss is.

Like I said, a majority of the cases, in the past, were “likely loss” — that’s how they were worded — and the workers were not compensated based on their real loss of work. That’s how it will help the workers — that this is being recognized. Their loss of earnings will be con- sidered, and they will be compensated accordingly, at a very, very minimal cost, like a 0.4-cent cost when you compare that to the premiums for the employer — 4/10 of a cent over a $100 payroll. I think that’s how it’s going to benefit the workers. They will get the real loss of earnings, as compared to the likely loss of earnings.

Many of those cases that you mentioned, Member, came into our offices, basically, from frustration of those injured workers, saying: “How is it that I was mak- ing $20 an hour, but my PPD award is based on $15? I’m getting only 90 percent of the lower value, not the real loss of earnings. ” I think that’s what’s behind this. M. Lee: I just have a series of questions on this

section 17. To carry on from my colleague the member for Chilli- wack, as to the questions that he raised, regarding the tim- ing of these changes and whether there was any re-assess- ment done of these changes, we’ve heard from the minis- ter that the consultations, of course, and the reviews took place prior to COVID-19. As we know, COVID-19 has Friday, July 31, 2020 Committee of the Whole 3

changed everything for this province. We’re in the midst of the pandemic and of all the good work that the Min- ister of Health and others have done to try and manage all of that challenge, but clearly, in the economic recovery, much, much more needs to be done. With the timing of these changes…. The minister con- tinues to refer to them as modest, with minimal impact. This

section 17, in the view of our opposition caucus, remains one of the most concerning sections of this bill. It does take, opens up — rebalances, as the minister describes…. It’s very important, at this committee stage, that we get the level of clarity, transparency and under- standing of the impact of this change. Appreciating the responses that the minister has provided to date to the member for Chilliwack, I just had a few clarifying ques- tions to start. [10:10 a.m.] When the minister talks about reopening…. We know that under

section 35 of this bill, which we will come to in this committee stage, the transitional element around

section 17 as it would amend

section 196 of the act would relate to claims that have been “made, but not finally adju- dicated, before the date this

section comes into force, and…that involves an injury, occupational disease or men- tal disorder that occurred before the date this

section comes into force. ” Could I ask the minister, please, to clarify what he meant by reopening? Hon. H. Bains:Member, I think I tried to explain it to you. Considering the times we are going through, we came back with very modest…. I’ll tell you how that qualified as being modest. When Parr came back with his report — combining the other three reports, he did the consulta- tions — he came back with recommendations that would have cost $1.5 billion, a one-time cost, and $70 million on an annual basis, ongoing costs on top of that. Now, yes, that was before the COVID-19 pandemic.

We looked at that report, and we looked at the times that we are going through. This package now has scaled back from a $1.5 billion one-time cost to a $27 million one-time cost. That’s why I call it modest. And from $70 million on an annual basis, now this package talks about $14.5 million annually. We did the analysis, we looked at the report that was presented to us with the recommendations, and then we looked at the times we are going through. The employers are going through tough times, workers are laid off, and employers need help. That’s why we are going with a pack- age that is modest.

It will improve certain benefits for the workers at a very, very modest cost. At the same time, it ensures that the employers’ premiums will continue on at a subsidized rate that they enjoy today, this year, next year and the year 2022. Now, you talk about reopening of the claims. So $15 million is if any claim gets reopened for a variety of reas- ons. They happen all the time. When the claim is allowed to reopen, then the new rules will apply. The new calcu- lation will take place. That’s why the $15 million is costed out for that particular area of this package.

Then the new claims that will come in are costed at $4.5 million on an ongoing basis, on an annual basis. M. Lee:I appreciate the response from the minister. [10:15 a.m.] The minister’s point of reference is based on all of the reports that have been received by government to date. We know, from the employer community, about the challenges around at least some of those reports, in terms of how they were formulated — including the Patterson report, for example — and concerns around apprehension of bias and all of that.

But putting all that aside, what my colleagues have indicated during second reading and in question period has been a lack of understanding, it appears, from this government, for recognizing that things have changed so fundamentally. In the absence of any clear, comprehensive economic recovery plan from this government, the Min- ister of Labour is bringing forward what he continues to describe as modest changes. But they are still significant, for the reasons that we will go through in a moment, for example, in

section 17. We’ve said that this continues to raise much uncertainty and additional costs. So that’s the reason why. The point of reference for the minister is the changes that could have occurred under the previous reports. The point of reference that I would suggest the minister should really appreciate is our point of reference currently for everyone involved in this province. We’re in the middle of this COV- ID pandemic, as everyone knows, and from an economic recovery point of view, we don’t see the leadership from this government in terms of the way out. I recognize that there are continued challenges.

I understand that. But this is not the time to be adding additional costs to the employers that make the jobs and continue those jobs, create the jobs, maintain the jobs for those who need to continue to be employed. We’re talking about adding additional costs and uncertainty to employers and businesses — small businesses, medium- sized businesses — all over this province, on top of, of course, the additional costs that this government has put forward over the last three years. Again, putting that aside, we’re talking about COV- ID-19. We’re talking about the special session of this House.

That’s the reason why we’re doing this committee session on a Friday here. Having said that, I just wanted to come back to the min- ister’s comment about reopening. I would suggest that the reopening language that the minister continues to use….

Section 35, in terms of the application and transition of this

section 17, is that…. It’s for claims that have not been 4 Committee of the Whole Friday, July 31, 2020

finally adjudicated. Those are claims that are currently still in process. Certainly, for new claims, one would expect that

section 17, if amended under this bill, will utilize that new framework, as the minister has described. I still do not see where existing claims that have been finally adjudicated are being reopened. Could I, again, cla- rify? Is the minister suggesting that there are existing claims that have been finally adjudicated that will be reopened by virtue of

section 17? Hon. H. Bains:I will not engage or answer the political rhetoric that the member has thrown around. I think much of that is baseless, but I will talk about the facts of the

section in front of us. The short answer is that claims will not be reopened just as a result of

section 17 passed here today. [10:20 a.m.] Claims can reopen. Some of the members may have some experience in WCB claims. The member may have that as well. Claims can reopen for a variety of reasons — for example, the recurrence of the injury for the worker. The medical condition may change. Those are some of the reasons why a worker will apply to reopen their claim. When that happens, then the new rule will apply. But they would reopen for those reasons, not because we have passed

section 17. When that happens, the new rule will apply, and they have costed out at a one-time cost of $15 million. So that’s the cost. Then ongoing basis…. When the claims are still in the process, when they are determined, then the cost would be $4.5 million year over year. I think that’s what the real meaning of this

section is. Cost is $15 million one time, to deal with in the event the claims got reopened for a variety of reasons, but not because of

section 17. Then the claims that are still in process, haven’t been decided…. The cost to deal with them would be $4.5 mil- lion every year going forward. M. Lee: Just to clarify, when the minister refers to $27 million and then $15 million…. Previously, he referred to $50 million, but I think he readdressed that. Could the minister please clarify the difference between the $27 mil- lion cost and the $15 million cost? Hon. H. Bains:I want to clarify. That’s why I keep on saying, in order to correct, I think, the member for Chilli- wack…. I may have heard wrong, but he was mentioning $50 million.

That’s not what I said. I said $15 million. That is the cost of this particular section, one time. There is another

section that will cost $12 million on a one-time deal. So the total cost of this package is $27 mil- lion one time. Then the ongoing cost for this particular

section — again, I want to be clear — per year is $4.5 mil- lion. But the total package that is before you, the total cost on an ongoing, year-by-year basis is $14.5 million. Again, let me repeat. The total cost of this package, one time, is a $27 million cost to the accident fund. On an ongoing yearly basis, annual basis, it will be $14.5 million. M. Lee: I appreciate the response, Minister, to clarify that. I think the member for Chilliwack and myself mis- heard you then. We heard $50 million. Because the minister mentioned it, Mr.

Chair, could I ask at this juncture, when the minister refers to $12 mil- lion, a one-shot deal increase, what is that other provi- sion in this bill that will incur that additional one-time expenditure of $12 million? Hon. H. Bains:Member, we’ll get to it very quickly, as soon as we pass this one. It’s in

section 20, actually. M. Lee:Thank you to the minister for that indication. Just coming back, the minister did refer to the increase going forward of $15 million. [10:25 a.m.] What I’ll do is I’ll just ask the minister to clarify what the minister was indicating. So it’s a $15 million increase for loss of earnings awards in 2019. What I heard the min- ister say was that the number of awards was 971. It’s the ministry’s expectation, with the passage of this bill, if it passes, that the increase in costs, by virtue of

section 17, will be a 25 percent increase. That would, by estimation, be an additional 242, approximately, number of loss of earn- ings awards, to bring it to about 1,213. That would mean the average cost of loss of earnings awards, for the purpose of this estimate, is about $62,000. Is that correct? Hon. H. Bains:I think the member can do the math, but I can tell you…. I’m relying on the calculations that have been done by the experts. They used those num- bers. So 971 LOE awards in 2019. They are estimating that these changes will result in 25 percent more LOE awards.

As I have said before, they are moving towards that currently, anyway, because the threshold has been lowered over the years. Again, what the total award, on average, awarded before 2002 was…. Today they are much lower. The calculations they have done for the cost of this particular section…. I have said that before. The one-time cost is $15 million, and ongoing costs will be $4.5 million. That’s how…. They cal- culated the number of claims that they have, how many they think will be reopened and then, ongoing, the differ- ence between LOE versus the loss of function.

They are fig- uring that that’s the cost, which I have mentioned a num- ber of times. M. Lee:Thank you to the minister for that response. As I mentioned previously, it’s a significant

section of this bill. My questions are with a view to create and under- stand and receive more clarity around the cost impacts Friday, July 31, 2020 Committee of the Whole 5

of this section. With that in mind, as the minister just referred to, in terms of numbers of LOE pension awards…. Could I ask, just as a point of reference, how many per- manent pension awards have been granted since 2002? [10:30 a.m.] Hon. H. Bains:Member, we don’t have those numbers going back, since 2002. I can tell you that in 2019, there were 6,296 awards that were a loss of function, and 971, as I mentioned, were LOE awards. M. Lee: I would suggest that it’s important to under- stand the progression of LOE awards that have been gran- ted in that context.

The minister has indicated that with the threshold lowering, there has been an increase in LOE awards over the last number of years. I think for the purpose of this dis- cussion at this committee stage, it would be very helpful if your ministry team was able to provide further informa- tion as to what the progression has looked like in terms of the total number of permanent pension awards since the change was made in 2002. I would request the minister, if it would be possible for his team to do the quick request, to share that number with us. Would that be possible, Minister? [10:35 a.m.] Hon. H.

Bains:Member, I don’t see any relevancy of the information you’re asking for, going back to 2002. I can tell you that if you read Parr’s report, which was made public, on page 34, he talked about it in there. What has happened since 2002, when the change was made? In 2002, you were looking at almost zero LOE awards after that change was made. Today, as I said, in 2019…. Now LOE awards have gone up to 971, if that helps you, Member. He also made reference in his report that the level of LOE awards now is the same as it was prior to the change in 2002.

But the cost of each claim is much lower — about 40 to 41 percent less now — because of all of the changes that were made in 2002. The lifetime pension was taken away, the wage loss calculation — 90 percent net versus 75 percent gross — and a number of others. If that information helps you, Member, that’s the best I can do at this time. Giving you numbers, year by year…. I don’t know how that is relevant to what you’re talking about. I’m giving you enough, I think. Almost zero in 2002 and 971 last year, of LOE awards, when we do the comparison.

The Chair:If I might remind the minister to please dir- ect comments through the Chair, as opposed to directly to the member. Thank you, Minister. The member for Vancouver-Langara. M. Lee: Thank you, Mr. Chair. Thank you, as well, for that reminder to myself. I appreciate the response from the minister and, cer- tainly, will come to the Parr report. I certainly have read, many times, pages 33 and 34. I wanted to, then, ask…. Let me just say this first. The reason why this is relevant is that we, I would expect, need to establish an understanding as to what the baseline has been. This will change under

section 17, this provision, in terms of how LOE awards would be dealt with. This is a change that, going forward, has been a trans- ition, let’s say, in terms of what has been referred to as the “so exceptional” test. The language under the current pro- vision, under

section 196…. As the minister has indicated, that has resulted, in terms of the thresholds being applied by the board, in an increase of LOE awards since 2002. Just so I have a better understanding of the trends here, could I ask…? It would appear, based on the minister’s responses…. The range of LOE awards since 2002 has ranged between zero and about 15 percent, based on the figure the minister provided of 971 out of 6,296 total awards. Has there been any year since 2002 that has seen LOE awards being more than 15 percent of total awards? [10:40 a.m.] Hon. H. Bains:Thank you, hon. Chair, for the remind- er.

Member, I think I have answered this question in many different ways. The experts have looked at all of that, the question that you are raising. They figured that the total cost…. In the event of the reopening of the claims — going forward, how many claims they’re handling today and how the trend is going, based on all of that information — they have calculated that the one-time cost would be $15 mil- lion to the accident fund and that ongoing costs would be $4.5 million annually. I think that’s the best information that I could give you. They have calculated that.

They estimate that the LOE awards may increase by 25 percent because of this change, and then I’ve given you the costs as a result of that as well. M. Lee: The minister referred to page 34 of the Parr report, which includes the statement: “The total number of LOE awards is now similar to levels prior to the 2002 amendments. ” Through this discussion here with the minister, Mr. Chair, there is a clarification that I would like to address with the minister, which is that when Mr. Parr was looking at the difference between prior to 2002 and now, that’s been based on, of course, the current wording of

section 196, which includes the “so exceptional” test, which does frame the threshold. Once this “so exceptional” test is effectively not opera- tional by virtue of

section 17 — the effect of it — we would expect that there will be a significant increase, potentially, 6 Committee of the Whole Friday, July 31, 2020

of loss of earnings awards because the “so exceptional” test is no longer a threshold. Does the minister agree with that? Hon. H. Bains:Member, I’m not an expert — I don’t know who else is an expert and watching here; maybe some of you are — but I can tell you that the experts have estimated that by making these changes, the increase in LOE awards will be by 25 percent. I have said that many times. M. Lee:I still have some questions on

section 17. Thank you to the minister. The discussion we’re having, of course, is on the legislation and the wording in the proposed bill. I am asking questions relating to the wording of the pro- posed changes in Bill 23 relating to sections of the act, as is my colleague the member for Chilliwack. When the minister refers to “experts, ” you would expect that the Minister of Labour is the lead on this bill, which the minister is.

I would suggest that the strong leadership team around the minister, in the ministry, should be able to provide to the minister some assistance with some of the responses to the questions that I and my colleague the member for Chilliwack are asking in this committee stage. [10:45 a.m.] My question that I asked around the lifting of the “so exceptional” test is one which is based on the current legis- lation. Again to the minister, when Mr. Parr, who delivered a report to this government and to the minister, makes statements in his report which the minister is taking on face value, that is his prerogative.

But I do think it’s important, at the committee stage in this bill at the least, that we have the opportunity, as members in this House, to ask questions about statements that are made in reports that the minister clearly is relying on. In the absence of a complete understanding of the trend lines around the number of pension awards that have occurred under this operative

section of the act, the num- ber of increased LOE awards that would occur, there are other considerations around this section, which I’ll be coming on to. I do think that, conceptually, the minister should have a view, with the lifting of the “so exceptional” test as a threshold — which is clearly spelled out in subsection 196(1) of the act, as all members of this House can read — that once you lift that restriction in the manner in which

section 17 of this bill is amending

section 196, it would stand to reason that there will be an increase in the loss of earnings awards beyond what has been seen since 2002. Again, does the minister agree that that will be the case? Hon. H. Bains:Let me give it one more try. The changes that we are dealing with now — removing or not utilizing the “so exceptional” test — and putting in the language that we are discussing now…. The board engaged actuar- ies, professionals. They have their financial people. They can look at the historical trends. They came back with, by doing all of this — that the LOE awards will be increased by 25 percent.

I have said that many times. Y es, the LOE awards will be going up by 25 percent. That’s the estimate. M. Lee: Let’s try this line of questioning in a different manner, then, in view of the minister’s responses. If we just establish a baseline understanding here in this committee stage…. What is the current WCB policy relating to chron- ic pain as it relates to loss of function awards? [10:50 a.m.] Hon. H. Bains:Member, the board does have a policy on chronic pain that flows from

section 134. All of that is considered by the board when we talk about increase in LOE by 25 percent, as per the changes recommended in

section 17. M. Lee: Is practice directive C3-1, relating to chronic pain, the current policy of the board? Hon. H. Bains: The board has a policy on a number of different scenarios and situations, which is over 1,000 pages. When we talk about increase of LOE awards by 25 percent, they have considered all of their policies that exist. How they calculate LOE awards versus loss of function awards…. They looked at all of that, and then they came back with the numbers that the LOE awards could increase by 25 percent. M. Lee: Thank you very much to the minister for that response.

Is it correct, then, that the ministry team has considered that under the general principles on that practice directive by the board, workers with chronic pain that is permanent and disproportionate to the associated physical or psycho- logical injuries may be granted permanent disability bene- fits under

section 195(1) of the Workers Compensation Act equal to 2.5 percent of total disability? [10:55 a.m.] Hon. H. Bains: We could mention any policy in the WorkSafe policy manual. As I have said before, they have looked at all of that — how this

section 17 will impact any different policy that they use in order to determine LOE versus LOF awards. They have come back that there’s a possibility of LOE awards to be increased by 25 percent, and then they came back with the cost implications. I have said that before. The one-time cost will be $15 million, and ongoing costs will be $4.5 million. M. Lee:Thank you to the minister for that response. As I said earlier, it…. The minister continues to bring Friday, July 31, 2020 Committee of the Whole 7

us back to the overall assessment done by the ministry, as he indicated earlier to my colleague the member for Chil- liwack and throughout my exchange with the minister. Just to have a fuller understanding of the impact of the proposed change under

section 17…. That is what I con- tinue to try and gain some understanding of. I am provid- ing one avenue here, currently for discussion, relating to chronic pain and citing what is a limitation, under the board’s own practice directives, at 2.5 percent. The reason why I’m doing that is because…. In

section 17(c), there is a slight wording change. That wording change says: “If the Board makes a determination under subsection (1)” of

section 196 of the act, “the Board may…. ” That wording, “the Board may, ” will be struck out and substituted with the words “The Board must. ” Well, that change in one word would mean, in effect…. By passing this legislation, the government is saying to the board that it no longer can apply practice directive C3-1, as I cited. Is that correct? Hon. H. Bains:We pass the act, if this passes here. Then I will leave it up to the board to determine how they apply this act through their policies. They have done that in the past, since 2002.

When those changes were made, they made those changes, and they came up with the policies to comply with the act that was given to them. [11:00 a.m.] Now we are making some changes here. We are saying the “exceptional” test shall be removed. Now they will be…. The PPD award will be based on the higher of the two: loss of function versus loss of earnings. This is to look at the real loss for the worker, so that we go back to the commitment that was made to the workers in 1917, as per the historical and great compromise. Member, we’re talking about workers now.

These are the people that help run the economy, working with the employer. When the workers are using the workers com- pensation system, they expect that they will be looked after. Their medical, their rehab and their earnings will be looked after, at least close to what they are losing. That was the promise made to them, and I think that’s what we are trying to do here. They’re not going to get more than what they’re entitled to or what they’re losing. At least they should be getting close to what they’re losing. That’s the whole purpose behind it.

These are the workers that help run those com- panies and help build those businesses. That’s how we build our economy — workers and employers working together. When you have a healthy, happy workplace, you have a productive workplace. We have heard…. As the member for Chilliwack had mentioned before, some of the most heart-wrenching stor- ies in our MLA offices are the ones from the injured work- ers, that the system isn’t looking after them when they’re injured or they become sick.

These are small steps that we are taking to help them rebuild their confidence in the system — both by the employer and by the workers — without costing the system a lot of money, considering the time that we’re going through. Again, WorkSafeBC has looked at this. The actuaries have come up with the numbers and the costs. We are talking about the numbers that I’ve given you before — one-time costs and then ongoing costs. WorkSafe and the experts have looked at the changes that we are recom- mending, and they have put the cost to it. That’s what the cost is, and I believe those are the right numbers.

If that’s what you want me to say, absolutely, I believe those numbers, because you’re relying on those experts. I think it will help the workers with a very modest cost to the accident fund and, at the same time, give the workers some very important benefits that they have been lacking. M.

Lee: In response to the minister’s statements, just to be clear, I believe all members of the House recognize that we’re all in this together, that employers and employees all over this province need to continue to work through this COVID-19 pandemic and continue to expect the kind of leadership we would expect from the government to set out an economic recovery plan in the midst of this, not make a change for which there’s no clear understanding of the cost and the increased uncertainty this will create under this bill for employers and employees.

Additional costs and uncertainty are not what employers and employ- ees need to maintain those jobs. Just coming back to the minister’s statements in response to my question…. My understanding of what the minister indicated is that this bill, this section, is intended to, with the passage, if it does pass…. The board will come on and develop or reassess its policies to deal with chron- ic pain. But as I quoted, the change in this bill, as set out in

section 17…. Y ou’ d expect that when the legislation cur- rently says “the Board may, ” that is consistent with what the minister expressed. [11:05 a.m.] What’s not consistent, though, is to suggest the board has that latitude, because the change says: “The Board must…. ” . With that one change of one word — from “may” to “must” …. This is legislation that we’re reviewing, in this committee stage, that changes how loss of function and loss of earnings awards will be dealt with. I clearly rec- ognize the importance of ensuring that the system works for workers and employers.

What we’re getting at here, though, is an understanding, a clear understanding, of the impacts of this change and the impacts of this bill. Again, to be clear, this

section 17 changes the approach that the board currently uses for chronic pain, where it is restricted to 2.5 percent. With that change, what is the expected increase in the number of awards for chronic pain that will relate to loss of earnings? Hon. H. Bains:Member, you can read it any which way 8 Committee of the Whole Friday, July 31, 2020

you want to read it. The wording changes are the wording changes. With the wording changes that the member has mentioned, the change will cost the accident fund $15 mil- lion, one time, and ongoing costs will be $4.5 million. The increase in LOE awards is estimated to be by 25 percent. That’s what the impact is of the changes that we’re recom- mending, from what it used to be. M. Lee: We had some earlier discussion, of course, in terms of the nature of the increase of LOE awards. The minister has shared with us the projections around the increase in number.

Can the minister also share, in terms of the makeup of the number of increased LOE awards, the nature of them, how many will relate to chronic pain or other issues that workers have? [11:10 a.m.] Hon. H. Bains:WorkSafeBC may keep that data. They looked at, historically, what categories they get LOF and what categories and how many in each of the categories they get LOE awards, out of those 971. They have that information. We proposed these recommendations and changes through

section 17. They looked at all of that. They looked at what their estimate is to have each and every category increase. But overall, they calculated that it will increase by 25 percent. And then they put a cost to it. They considered chronic pain versus a broken leg or the loss of a limb. They have looked at all of that. They came back that the overall increase will be 25 percent and that the cost, considering all those different categories that the member is asking, will be $15 million a year and $4.5 mil- lion going forward each year. M.

Lee:I appreciate the response from the minister and the continued overview of the ministry’s analysis. That analysis, though, one would expect, would be based on a review, as the minister mentioned earlier, of the many policies of the board, of which we are discussing, currently, just one, relating to chronic pain. Is there a breakdown that the ministry has in terms of the makeup of the increased number of loss of earnings awards that is expected with this change? Hon. H. Bains:This change got presented to WorkSafe- BC. They looked at their data. They looked at the informa- tion that they work with.

They put costs to it. They estim- ated how many new claims could be moved into LOE. They calculated that would be by 25 percent total. They may have looked at each different category for how many they would expect. But overall, it’s 25 percent. That’s the number that they were given. M. Lee:Thank you to the minister for that response. Obviously, here at the committee stage, I am attempting to get a clear understanding of the nature of the review, the analysis done on the impact of this change.

That is, clearly, asking questions, by way of example, to understand the nature of the analysis that’s been done of this particular section. I am not receiving a clear understanding of that analysis beyond the overall numbers. Let me just ask this question. Does the minister agree, though, that with this change under

section 17, the effect of this change will be that where, under current board policy, that practice directive C3-1…? The loss-of-func- tion awards is limited up to 2.5 percent of the total disab- ility? That with this change under

section 17, and in the absence of any further board policy — which, as the minis- ter referred to earlier, the board may or may not be doing; again, we’ve had this discussion about “must” — it is pos- sible, with this change, that chronic pain awards could be as high as 100 percent of total disability? [11:15 a.m.] Hon. H. Bains: I’ d like to answer the member’s ques- tion. The chronic pain calculations are done through 195(1). It does talk about 2.5 percent. But this

section is amending 196. The board will be making a decision to calculate the higher of the two. That could happen today, under excep- tional circumstances. What this does is…. The board have looked at that. They looked at what the possibilities are of higher awards than 2.5 percent under chronic pain. They have looked at all of that. They have come back with a recommendation that…. Their estimate is that the claims for LOE would increase by 25 percent, and then they put a cost to it. They have calculated all of that.

They will be developing their policies to determine how chronic pain calculations are done under 196 and how they are conducted under 195(1). Then they’ll make a decision. But their policies develop based on these changes. M. Lee:I appreciate that response from the minister. To come back to the statement I made earlier about sec- tion 17(

c) set out in this bill…. To clarify, in view of the minister’s last response: what is the intended effect of the change in

section 17(c)? [11:20 a.m.] Hon. H. Bains:The

section of change that we’re talking about, Member, is to provide that for a permanent partial disability, the amount of workers compensation paid to the injured worker must be based on the higher of: the work- er’s likely loss of earnings, based on the nature of their injury, known as the loss of function calculations; or the worker’s actual loss of earnings; or an estimate of the actu- al loss, known as the loss of earnings calculations. The current loss of earnings approach can be used only in exceptional circumstances. That’s the change. M.

Lee:What other policies of the board that have been reviewed will need to change, meaning new policies of the Friday, July 31, 2020 Committee of the Whole 9

board will need to be established by virtue of the change under

section 17 of this bill? Hon. H. Bains:That’s vested in WorkSafeBC. They will be looking at the changes, if they pass here, and then they will be devising policies on how they apply the changes that we make in this legislation. M. Lee: I appreciate the response from the minister. I would have thought, though, that with the analysis that’s been done to derive the estimation of a 25 percent increase in LOE awards, that review would have taken the place of all current WCB policies, including the one that we’ve been discussing here at length relating to chronic pain. Has that analysis been done? [11:25 a.m.] Hon. H.

Bains:Of course, the board, with the anticip- ation of the changes being proposed, did their analysis. That’s how they came back with those numbers that I’ve been repeating, time and again, and the cost implications and the policy implications as a result of these changes, if they pass here. Those are the numbers that we were relying on, after the analysis was done. It’s not just recently. Paul Petrie was hired by the board to do their policy and procedure review.

He recommended that there are issues with this particular policy, where workers are undercompensated during these circum- stances when they calculate PPD awards. That’s why we’re recommending these changes. M. Lee:Thank you to the minister for that response. Just to come back to the minister’s previous response relating to the current subsection 196(1), which clearly sets out the “so exceptional” test. Under subsection 17(

a) of this Bill 23, this section, of course, will be deleted and repealed and substituted with the wording that’s set out in subsection 17(a)(1) of this bill. With that change…. The minister has referred previ- ously to the lowering of the threshold, which has resulted in an increased number of LOE awards. What is the cur- rent threshold that is being applied under the “so excep- tional” test? Hon. H.

Bains: Member, a WorkSafeBC practice dir- ective stipulates that a significant loss of earnings “exists” where there is a difference of at least 25 percent between the worker’s pre-injury earnings and the combined total of post-injury earnings and the amount of the LOF award. A “significant loss of earnings” does not exist when the dif- ference is 5 percent or less. However, WorkSafeBC staff have the discretion to take into account the individual cir- cumstances of each case to determine if a significant loss of earnings exists. [11:30 a.m.] In practice, the threshold has declined over the years, as we said.

An increasing number of LOE awards already are being issued for claims where the difference is less than 10 percent. In some instances, LOE awards are issued when the difference is less than 5 percent. M. Lee:I appreciate that response. Just to follow on that response, recognizing that the minister has indicated, pre- viously, 971 awards in 2019…. Of the 971 awards, how many of those awards would be under 10 percent and under 5 percent? Hon. H. Bains:We don’t have those numbers. I ques- tion the relevancy of the question to

section 17. M. Lee: The relevance is, as we have discussed…. The elimination of the “so exceptional” test effectively brings the threshold down to zero. Is that correct? Hon. H. Bains:Member, I will draw your attention to the Parr report again, on page 34.

This is what he said on that question: “Given that the number of LOE awards is now similar to pre-2002 levels and that the costs of those awards have dropped by almost 40 percent, the cost implications of this proposal are less than many would think. “If the threshold is set at 5 percent, the annual cost would be ap- proximately $2.5 million, the average premium rate would increase by about 2/10 of a cent per $100 payroll, and the one-time increase in liabilities would be approximately $7.6 million. ” That’s if you consider the threshold at 5 percent. “If the threshold is effectively set at zero, the annual cost is es- timated to be no more than $4.5 million, the increase to the aver- age premium rate would be about 4/10 of a cent per $100 payroll, and the one-time increase in liabilities would be approximately $15 million. ” I have repeated those things time and again.

That’s what Parr also confirmed. M. Lee: Just as the minister refers back to the bottom of page 34…. Earlier, of course, through this exchange, we’ve been talking about the analysis that has been done by actuaries. Was there any utilization by Mr. Parr of any actuarial analysis to make the statements that the minister just quoted? Hon. H. Bains: WorkSafe provided that information to Parr. We independently received those numbers from WorkSafeBC ourselves. [11:35 a.m.] M. Lee: I would like to ask if the minister could explain the rationale for the deletion and the repeal of subsection 196(2). Hon. H.

Bains:It means that the “so exceptional” test is no longer applicable. They both go hand in hand. 10 Committee of the Whole Friday, July 31, 2020

M. Lee:I would like to turn to another example with the minister. We know, of course, with the increased aware- ness and supports that are necessary across the board, in terms of mental health and mental disorders, that it is a very large focus for all members of the House. Could I ask the minister…? What is the number of com- pensation cases for what is currently

section 135, mental disorders, over the past ten years? Hon. H. Bains:This

section amends

section 196. I think we’ve passed

section 12, which amended 135. The board has looked at all different scenarios, whether it was chronic pain, mental health pains or others. That’s how they came up with a total number of additional claims that may come and fall under LOE awards. They came back with a total of a 25 percent increase, and the cost thereof. M. Lee: As the minister acknowledged, in terms of the types of claims and the nature of them, we’ve only covered one type: chronic pain. I am now asking questions relating to mental disorders.

Because of the nature of them for some — for those work- ers who suffer from severe mental disorders — under sec- tion 17, one would expect that there will be, potentially, loss of earnings awards for those, such as teachers or front- line workers, for challenges within the workplace. They are not able to return to the workplace, and there’s a signific- ant impact on their loss of earnings. [11:40 a.m.] This is the reason for why I am asking questions relating to mental disorders. Clearly, mental disorders, as a cat- egory, was not as much of a focus prior to 2002. When Mr.

Parr refers to the number of expected LOE awards as being similar to the total number prior to the 2002 amendment, of course, we’re talking about a different legislative frame- work. We’re talking about an increased focus, an increased need around mental health and mental disorders that are coming forward to the board. The minister has not been able to provide data or infor- mation relating to claims dating back anywhere beyond 2019. That raises a concern in terms of the nature of what we’re discussing here.

I think the trend lines are important to understand, and the impacts on cost — which is what I’m trying to understand, as well as the member for Chilli- wack. If we just pick 2019, what was the number of claims relating to compensation for

section 135 mental disorders in 2019 versus the number of accepted claims for that same reason? Hon. H. Bains:I have said this many times before. Let me repeat that again. I don’t question the analysis done by the experts. It seems to me that the member is suggest- ing that they may have missed something, that they may not have considered certain parts of these LOE awards that have been awarded within the 971 cases. I’m suggesting that the experts looked at the trends. They looked at what’s before them. They looked at the data.

They came back with the numbers that suggest that there would be a 25 percent increase. They looked at the chronic pain cases. They looked at the mental health claims. It’s not that the mental health claims were going to start next year. They already had them; they calculated that. As to loss of limbs and all the other different scenarios the member can come up with, they have looked at all of that, and they have that data.

They did the analysis, and they came back that, by making these changes that we are suggesting, if they pass, it would cost the accident fund $15 million one time and then $4.5 million on an ongoing basis. That’s what the analysis is, and that’s what they have done. They have looked at each and every category, as I expec- ted them to do, and then they gave us those numbers. I believe in those numbers. M. Lee: As we have these exchanges, I do, at least for one point, have some level of increased understanding as to the process in which this bill has been presented.

Thank you to the minister for that further response. [11:45 a.m.] There are a few points that can be discussed, based on that response. The first question would be just to make this observation. Certainly, in terms of the Parr report, which is dated February 2020, there are a few pages — pages 33 and 34 — devoted to this particular topic area. The level of category analysis — as the minister generally referred to it just now — as I understand it, was not included in the report or the analysis itself.

That’s the reason why, of course, at committee stage we are, as members here, presented with both the bill and the related documents to the bill, which we find, cobble together and refer to. Certainly, the Parr report is one of those documents. That’s the information basis on which we are having this discussion, which is the reason why, again, I’m asking these questions. This is another area that is beyond an emerging trend. It is a crisis as well. We’ve seen challenges throughout our province.

So one would expect that it would have a signi- ficant increase in the number of loss-of-earnings awards for mental disorders. That’s the reason why I’m asking these questions, again, to gauge the level of analysis, the level of consideration of the cost impact of this change under

section 17. That is the reason why I’m asking these questions. Was there any further analysis of a category impact nature provided by Mr. Parr? Are there additional docu- ments or additional analyses that are not included in this report? [11:50 a.m.] Hon. H. Bains:The information we are using is used by Mr. Parr, and the WCB provides us that directly. That’s the Friday, July 31, 2020 Committee of the Whole 11

information we have, based on the analysis that I did and the cost implications. M. Lee: That is mostly consistent with what previous responses he provided. If I’m to understand that, then, WorkSafe has provided the basis of information which Mr. Parr worked with, and that has been reviewed and con- cluded upon, in Mr. Parr’s recommendations, as the min- ister quoted from the bottom of page 34, in terms of the ministry’s analysis relying on the work done by WorkSafe. This would mean, just to come back to the category ana- lysis….

In the review that’s been done, which forms the basis of the Parr report as well, what category analysis has been conducted? Hon. H. Bains:My expectation is that we consider all categories. They came back with the numbers that I shared with the member, through you, Mr. Chair. Those are the numbers, and the numbers haven’t changed. They gave those num- bers to Mr. Parr. They gave those numbers to us, based on their own analysis, looking at all different categories and different scenarios, different illnesses. If anything has changed, they would have advised us.

They have not advised us if there’s any different information than what they’ve already provided, which I am sharing with you. M. Lee: The minister did anticipate a further question there in his last response. Just to ask the question…. Obvi- ously, COVID-19 has put a tremendous burden on many workers in this province, for a variety of different reasons. Has there been any increase in claims filed for mental dis- order under

section 135 over the last four months? Hon. H. Bains:I don’t know if I understand the relev- ancy. [11:55 a.m.] To answer the question, overall claims in the last four months may have been down, I was advised, because of the COVID-19 and not very many people are working. But the mental health claims have been on the rise. When we look back, the trend has been there. What we are talking about here is the PPD award, going forward. The PPD award, you know — the higher of the two, between the loss of function versus loss of earnings: that’s what this

section is all about. What the trend and the claims, overall claims…. Whether there are mental health claims higher in the last four months or lower or the same, I think it’ll be deter- mined how many of those end up being in the category of determining the PPD awards. Only time will tell how many of those will end up in that category. But again, based on the data that the board had available to them, looking at all of that — what I just mentioned — and dif- ferent categories, they came back with those numbers that I shared with you already. I move that the committee rise, report progress and ask to sit again.

Motion approved. The Chair:Thank you, Members, and thank you, Min- ister. This committee stands adjourned. The committee adjourned at 11:56 a.m. 12 Committee of the Whole Friday, July 31, 2020

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Document details

Collection	British Columbia — Debates (Hansard)
Citation	20200731am CommitteeWhole n1
Type	hansard
Volume / chapter	20200731am CommitteeWhole n1
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	1947c8486ac1bea2b713d03dba0afe22eb047d6b

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