The workers’ compensation board will slash employers’ premiums by 30 per cent after eliminating its unfunded liability a decade ahead of schedule — a move the province says will boost the economy but labour advocates say could harm workers.

The announcement is part of a plan to lower taxes, reduce regulatory burden, and create jobs, Labour Minister Laurie Scott said Wednesday.

“Employers can use these major savings to put more money back in the economy,” she said. “Workers can have confidence that the (Workplace Safety and Insurance Board) has a sustainable system with enough money to pay for their future benefits.”

Sang Hun Mun, who fractured his right foot falling off a roof in 2005 and is now a part of the grassroots Injured Workers Action for Justice (IWA4J) group, said the insurance premium reduction is concerning.

“Thirty per cent is unimaginable,” he said. “That really means they’re going to cut more injured workers’ benefits.”

WSIB president Tom Teahen said the board’s improved financial situation would translate into better services.

“A big part of this is the ability to ensure we can offer the best health-care services,” he told the Star, including new plans to ensure “better regional services and regional coverage across the province.”

The unfunded liability refers to the difference between the projected future costs of paying benefits to injured workers with existing claims and the money in the board’s accident fund. Ontario employers are legally required to pay WSIB insurance premiums in exchange for immunity from lawsuits from injured workers.

In 2009, the province’s auditor general warned that the WSIB should deal with its $11.4 billion accident fund shortfall to safeguard its “commitments to provide workers with the benefits to which they are entitled.”

The drive to reduce the board’s liability began in 2010 under Liberal appointee David Marshall, the board’s president between 2010 and 2015. Teahen, who had previously served as chief of staff to former premier Kathleen Wynne, called Wednesday’s announcement an “important milestone.”

“It sets us up for the future and is a real turning point for the WSIB so that we now have a guarantee on benefits that workers are owed going forward and we are able to focus on how do we provide even better service,” he said.

Aidan MacDonald of the Toronto-based Injured Workers’ Clinic called the eight-year drive to reduce the board’s unfunded liability a “manufactured crisis” paid for by significant reductions to injured workers’ entitlements.

While private insurance companies are prohibited from having an unfunded liability in case they go bankrupt, the WSIB has a legally-guaranteed revenue source in the form of employer premiums.

“Since 2010, compensation benefits paid to injured workers have been cut in half,” MacDonald told the Star.

In 2016, a group of lawyers, doctors and labour groups formally requested an ombudsman investigation of the board, alleging it “systematically” ignored the medical opinions of workers’ own physicians and unlawfully blamed pre-existing conditions for their illnesses in a bid to cut payouts.

Facing a class-action lawsuit from injured workers, the WSIB announced in December it would abolish its pre-existing conditions policy instituted in 2012 and review 4,500 claims made by workers whose compensation may have been unfairly reduced.

A 2017 report by the Industrial Accident Victims’ Group of Ontario found that the WSIB reduced the amount it spent on prescription drugs for injured workers by one-third between 2010 and 2015. The study, based on freedom-of-information requests, also found that acceptance rates for permanent injury claims dropped by a third, from 9.3 per cent to 5.9 per cent over the same time period.

“In light of this wonderful financial situation at the board, where is the restitution for workers?” asked Maryth Yachnin, a staff lawyer with IAVGO.

Teahen said the overall volume of injury claims fell by 22 per cent since 2010, resulting in cost savings for the board. He said the biggest factors in reducing the unfunded liability were three consecutive years of increases to employers’ premiums, better-than-expected returns on WSIB investments, and improved return-to-work rates for injured workers.

Average health-care spending on workers has remained constant since 2010 at around $1,500 a head, he added. According to board statistics, 92 per cent of injured workers return to the job with no lost wages within a year. The board does not track employment outcomes beyond a year.

A 2015 study conducted by professors at McMaster and Trent universities looking at injured workers with permanent impairments in Ontario found that 46 per cent were living on the poverty line five years after their accident.

Some business groups welcomed the premium cut.

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“Premiums come out of the pockets of business owners. Today’s news means that this money saved can be better spent on job creation, new technologies and infrastructure, and better, safer workplaces,” said Rocco Rossi, president and CEO of the Ontario Chamber of Commerce.

In question period Wednesday, NDP labour critic Wayne Gates called the 30 per cent reduction in premiums a “kick in the teeth for workers of this province.”

“Under 15 years of a Liberal government, injured workers’ claims were increasingly denied,” he said. “These injured workers face barriers to having their claims accepted, resulting in billions of savings already for big employers.”