Canada Celebrates 100 Years of Workers’ Compensation

100 years ago, in 1913, the Hon. Sir William Ralph Meredith, Q.C., LL.D, at the time Chief Justice of Ontario, tabled his Workers’ Compensation report in the Ontario Legislature. From this report emerged the Meredith Principles, which are the tenets upon which the Ontario workers’ compensation system was built, the impact of which was felt gradually throughout Canada.

Not yet a Chief Justice, in 1910, Meredith was appointed to head an Ontario Royal Commission to study workers’ compensation systems throughout the world and to make recommendations.

In a 2011 submission to Ontario’s Workplace Safety and Insurance Board (WSIB) Funding Review Commission on the Meredith Principles, Robert Storey, professor of labour studies and sociology at McMaster University demonstrated the extensive work Meredith covered over three years:

“Meredith gathered a great many documents, travelled to the distant shores of England, Belgium, France, and listened to and questioned participants in the 27 ‘Sittings’ of his Royal Commission. All of these sources of information weaved their way into Meredith’s thought processes, his Draft Bill, and his Final Report.”

The recommendations which are now known as the Meredith Principles outlined a trade-off in which workers’ relinquish their right to sue in exchange for compensation benefits. The principles include five basic concepts that underline most workers’ compensation legislation in Canada today. They are:

1. No-fault compensation, which means workers are paid benefits regardless of how the workplace injury occurred.
2. Security of benefits, which means a fund is established to guarantee funds exist to pay benefits.
3. Collective liability, which means that covered employers, on the whole, share liability for workplace injury insurance.
4. Independent administration, which means that the organizations that administer workers’ compensation insurance are separate from government.
5. Exclusive jurisdiction, which means only workers’ compensation organizations provide workers’ compensation insurance.

In addition, employers are expected to pay the full cost of the system.

To put it in historical context, Cheryl Tucker, Executive Director of the Association of Workers’ Compensation Boards of Canada (AWCBC), explains:

“The workers’ compensation system is an important safeguard for Canadian workers…Today, when workers are injured, they receive treatments and benefits while they return to health and work. And employers are protected by a shared liability insurance model, with protection from lawsuits.”

According to the association:

“It’s a stark contrast to what workers faced in the early 1900s when crowded factories and unsafe working conditions were common. When workers were injured, great economic strain was placed on families, who were often left impoverished if the main breadwinners were injured and unable to work. Injuries also impacted employers who were faced with the risks and uncertainty of litigation.”

“The Canadian workers compensation system was a remedy,” says Tucker; “one that was badly needed at the time.”

Over the years, workers’ compensation legislation has been strengthened and modernized through amendments and new versions have been enacted, but the compensation structure has maintained its footing on the foundation of the Meredith Principles.

However, professor Storey believes we are now at a similar crossroads as when the Meredith Principles were enacted. He stated in his 2011 submission that the current workers’ compensation law is actually out of sync with Meredith’s Principles:

“It is true that the funding provisions of the [Workplace Safety and Insurance Act] were not fundamentally altered between 1914 and 2010. However, that does not mean that its ‘principles’ have remained unchanged…Workers’ compensation, as conceived by Meredith, was designed when actuarial science was in its infancy, instituted prior to public provision of health care, social welfare and old age pensions, and designed to displace private litigation arising out of workplace injuries in an age when negligence doctrine was in a formative stage, class actions unknown and contingent fees forbidden.”

This has led to numerous challenges, the most pressing of which is a substantial unfunded liability. The question for Storey is whether the workers’ compensation system in Ontario will continue on its current path, switch to a more insurance-like track or find a middle road in order to meet its obligations.

What’s clear, according to the AWCBC is that “The workers’ compensation system is significant within the Canadian economy, covering about 8 in 10 Canadian workers in an insurance model funded by Canada’s employers”:

• Workers’ compensation organizations support about 250,000 workers annually through lost-time injuries
• Close to one million employers in Canada are covered by workers’ compensation insurance
• Many workers’ compensation organizations are also involved in injury prevention
• Workers’ compensation organizations in Canada pay over $5 billion annually for health care, vocational rehabilitation and loss of earnings benefits

Obviously, whatever path the province chooses, the decision will have a major impact on Ontarians. While today’s decision involves many more variables than a century ago, it is not one we can avoid making, although it likely will not please everyone. Hopefully, those chosen to find this new way will create a plan to guide us for the next hundred years.