News & Information

New Ontario Workplace Safety and Insurance Board initiatives for 2013

Guthrie Insurance

May 22 2013

Mandatory coverage in construction industry
Clearance certificates
Offences and penalties
Benefit policy review
Premium rates
Proposed amendments to the act


The Workplace Safety and Insurance Board is in a state of flux, with many changes occurring and more on the horizon. This update provides:

a summary of the new mandatory coverage in the construction industry policies;
the latest on the 2012-2013 benefit policy review;
information on rate changes for 2013; and
an outline of proposed amendments to the Workplace Safety and Insurance Act.

Mandatory coverage in construction industry

Since January 1 2013 mandatory coverage under the Workplace Safety and Insurance Act generally applies (subject to the exceptions discussed below) to:

independent operators;
sole proprietors;
partners in a partnership; and
executive officers of construction corporations.

These individuals are now considered 'workers' under the act.

If no other workers are hired, the sole proprietorship, partnership or corporation is deemed an employer for the sole proprietor, partner(s) or executive officer(s).

All of the rights and obligations of workers and employers under the act extend to the above-mentioned deemed workers and employers.

Deemed employers are required to register with the board and remit premiums based on their insurable earnings. Executive officers and partners whose businesses are already registered with the board must report their own earnings and pay premiums.

A person operating a business alone as a sole proprietor with no workers or as a sole officer corporation is required to file a status declaration with the board at the time of registration in order to confirm his or her independent operator status. This status will remain in force until a material change occurs. A 'material change' is anything that may affect an individual's classification and therefore his or her obligations to pay board premiums. Changes in business activities or ownership are also considered material.


Home renovation construction work
Mandatory coverage generally does not extend to independent operators, sole proprietors, partners in a partnership and executive officers that work exclusively in the area of home renovations.

'Home renovation construction' is considered to be any work undertaken at an existing private residence that is occupied or that will be occupied by the person who directly retains the contractor or by a member of the person's family.

An 'existing private residence' includes:

condominium units;
apartment units;
seasonal or recreational properties (eg, cottages); and
incidental structures that are not used for commercial purposes (eg, garages, sheds, fences and pools).

The home renovation construction exemption is narrow and can be easily lost.

For example, if an independent operator hires a subcontractor, a clearance certificate must be obtained in order for the operator to avoid being deemed the subcontractor's employer. Further, if an independent operator hires workers, it is considered an employer under the act and must register with the board, which also means reporting the workers' insurable earnings. However, the independent operator remains exempted.

The home renovation exception is lost when a person not occupying the residence retains the contractor, or where the work is done on a structure on residential property that is used for commercial purposes.

Further complications arise when both exempt and non-exempt home renovation work is carried out. Independent operators, sole proprietors, partners in a partnership and executive officers are subject to mandatory coverage if non-exempt construction work is undertaken. If an independent operator performs home renovations and only some non-exempt construction work, earnings from both must be reported. Registration is also mandatory for corporations and partnerships performing both, regardless of the fact that one partner or executive officer may perform home renovation work exclusively.

An individual performing both exempt home renovation and non-exempt construction work can cancel coverage when the non-exempt construction work ceases. The individual must contact the board to confirm that a change of circumstances has occurred. Advising the board immediately is preferable because the exemption will not be applied retroactively. A minimum coverage period of three months applies. For example, if an individual ceases non-exempt work after two months, he or she must remain covered for an additional month before coverage is cancelled. The minimum coverage rule does not apply to business closures.

Partner or executive officer
The second exemption relates to partnerships, corporations with workers and corporations with no workers but more than one executive officer. The exemption does not apply to a corporation with a sole executive officer and no workers.

One officer in a corporation or one partner in a partnership can apply for an exemption from mandatory coverage if the individual does not perform any construction work. 'Construction work' includes manual labour of any kind, skilled or unskilled (eg, the operation of machinery), as well as the direct supervision of workers on site. However, an exempted officer or partner can conduct periodic site visits, provided that he or she does not perform any construction work.

The selected partner or executive officer seeking the exemption must file a declaration by completing and submitting an applicable form with the board. The board reserves the right to grant or deny the exemption. If any material change occurs (eg, if the partner or executive officer engages in construction work), the board must be notified within 10 days.

Non-exempt executive officers or partners who do not carry out any construction work may report their earnings under Rate Group 755 (currently at a rate of C$0.21/C$100 payroll).

Clearance certificates

In general, any principal hiring a contractor or subcontractor must obtain a clearance certificate from the contractor or subcontractor before construction work begins. A 'principal' is defined as any party which grants a contract for construction work. Thus, an independent contractor hiring a subcontractor is considered a principal. However, householders are not included and are not required to obtain clearance certificates.

The purpose of a clearance certificate is to ensure that the contractor or subcontractor complies with their obligations under the act. Failure to obtain a clearance certificate, or commencing construction before one is issued, is an offence under the act. The clearance certificate must be valid for the entire period during which construction is undertaken. Clearance certificates are valid for only 90 days, but are subject to renewal. Principals and contractors must keep copies of clearance certificates for a period of three years.

In order to be issued with a clearance certificate, the contractor's account with the board must be in good standing. For example, a contractor must have an open account with the board and not have outstanding amounts owing. A clearance certificate can be issued when an account is not in good standing in some circumstances (eg, if the outstanding amounts owed by the contractor are paid by the principal or if a payment plan is put in place).

Obtaining a clearance certificate absolves a principal from any liability arising from potential outstanding amounts owed by a contractor to the board. Through the clearance certificate programme, the board is effectively waiving its right to pursue payment from principals for any outstanding amounts owed by a contractor or subcontractor. When a contractor owes money to the board, the principal can be liable only for a maximum amount equivalent to the labour costs under the contract.

Offences and penalties

The board will not enforce or prosecute any party for failing to register with the Expanded Compulsory Coverage in Construction Requirements until January 1 2014. However, the board will fully prosecute any party which makes false or misleading statements or representations to the board, or wilfully fails to report a material change in circumstances which disentitle it to an exemption (eg, if a home renovator wilfully fails to advise the board that he or she has undertaken a commercial contract). If non-compliance persists beyond January 1 2014, the board reserves the right to take into account any non-compliant period between January 1 2013 and December 31 2013.

The suspension of prosecutions notwithstanding, independent operators, sole proprietors, partners in a partnership and executive officers in a construction corporation are legally required to comply with the new mandatory coverage rules. The board can still make any adjustment to an individual's account, as well as charge interest on outstanding amounts.

Once prosecutions commence in January 2014, penalties for non-compliance with the new rules will be hefty. If an individual commits an offence, the penalty is a fine not exceeding C$25,000 or imprisonment not exceeding six months or both. If a corporation commits an offence, the penalty is a fine not exceeding C$100,000.(1)

Benefit policy review

In January 2012 the board announced a new policy framework for development and renewal.(2) The framework establishes a process to review and revise board policies. The board also outlined its 2012-2013 policy review agenda(3) with four key benefit policies for review:

work disruptions;
permanent impairments; and
aggravation basis.

In July 2012 the board released a discussion paper,(4) which outlined the purpose of each policy and concerns cited by the board and workplace parties regarding the application of each policy. Workplace parties and the general public were invited to participate in the review process by making written submissions to the board's consultation secretariat(5) or attending public hearings(6) scheduled throughout the province. Public consultations ended in November 2012.

Benefit policy review chair Jim Thomas held an information-sharing session with stakeholders in February 2013, which included an overview of what he had learned from them and next steps in the consultation process. His final report should contain recommendations for revisions to the above policies.

Premium rates

Board premium rates will increase by 2.5% for all employer rate groups in 2013. The board describes the increased rate as "a necessary step to reducing the WSIB's unfunded liability (UFL), which has grown to $14.2 billion". Board chair Elizabeth Witmer said that the decision to increase rates "will enable the WSIB to meet the government's requirement that the WSIB be 60% funded by 2017".

The rate increase comes less than one year after the Arthurs Report(7) recommended significant changes to the board's practice and processing of rate group premiums. In particular, Arthurs rejected the notion that rates should be "affordable", stating that:

"[I]nsurance costs what it costs. If employers do not want to pay what it costs, they should address their concerns not to the WSIB but to the Ontario legislature…The political marketplace…should be conducted at Queen's Park, not on Front Street".

Further, the report recommends that employers should pay more in rate group premiums to begin paying down the unfunded liability. It is unclear from the board's press release whether the 2013 rate increase includes a portion for unfunded liability payment.

Proposed amendments to the act

On October 22 2012 the Ontario Ministry of Labour announced two proposed amendments to the act in order to "promote the long-term stability of the workers' compensation system". The proposed changes would allow the board to:

review loss of earnings benefits after 72 months; and
base survivor benefits on the average earnings of the deceased worker's occupation or trade, rather than the statutory minimum currently mandated under the act.

Under the existing loss of earnings policy, benefits are generally 'locked in' after 72 months, even if the injured worker's condition improves or if he or she rejoins the workforce. The board can review an injured worker's loss of earnings benefits after the 72-month period only if the worker's condition significantly deteriorates. The proposed amendment appears to allow the board to apply the material change in circumstances criterion at any point during receipt of loss of earnings benefits. Ontario is the only province that locks in loss of earnings benefits after 72 months.

With regard to survivor benefits, existing board policy provides that the minimum amount of payment for full loss of earnings is the lesser of the minimum for the year of the accident/disease or the worker's net average earnings before the accident or disease. The minimum loss of earnings payment for 2012 was C$17,042.48.

It is anticipated that these amendments will be introduced during the current session of the Ontario Legislative Assembly.


As the board continues to implement recommendations from both the Arthurs Report and the KPMG Value-For-Money Audit,(8) employers can expect more changes to Ontario's workers' compensation system. The board has already forged ahead with some momentous changes to coverage in the construction industry. However, the full effects of the board's benefit policy review are yet to be felt. Employers would be well advised to expect significant changes in the four benefit policies under review.

For further information on this topic please contact Kevin MacNeill, Samantha Seabrook or Daniel Mayer at Heenan Blaikie LLP by telephone (+1 416 360 6336), fax (+1 416 360 8425) or email (, or


(1) The foregoing is only a summary of a complex and significant development in the area of board law. The specific wording of the act and applicable board policies in any given case should be consulted. In particular, the following board policies should be reviewed:

12-01-06, Expanded Compulsory Coverage in Construction.
14-02-18, Insurable Earnings - Construction.
14-02-19, Clearance Certificate in Construction.
22-01-10, Offences and Penalties - For Compulsory Coverage in Construction.

(2) Available at

(3) Available at

(4) Available at

(5) See

(6) See

(7) Available at's%20Workplace%20Safety%20and%20Insurance%20System.pdf.

(8) Available at

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