Lots of ppl emailing and tweeting me about this, and it’s become a political football, so let’s just dig into a bit more of the context on it so we can understand the debate better… 1/
First off, the WorkSafeBC surplus union and business has been fighting to spend for 18 years is not cash in a vault. It’s the gain and increase in the value of its investments over time. It exists the same way your RRSP gains exist - if and when at the moment you cash them out.
Think of it like this: WorkSafeBC has an $18b “accident fund” right now, much of which is invested. It only needs $15b to be at 130% asset to liabilities ratio it’s set. So the $3b difference is the surplus.
If stock market drops 15%, say, that’s almost $3b in losses right there.
If stock market drops 15%, say, that’s almost $3b in losses right there.
Another thing: The BC government (be it NDP or Liberal) does not control WorkSafeBC’s investments. That’s the BC Investment Management Corporation, which also handles the public service pension, MLA pension, teacher’s pension, etc. That’s who makes the investment decisions.
Could the $3b come back as the stock market rebounds?
Sure.
But in the meantime, the NDP gov’s plans to spend it (including planned legislation this year) on worker benefit improvements, have been hard hit and will need to change.
Sure.
But in the meantime, the NDP gov’s plans to spend it (including planned legislation this year) on worker benefit improvements, have been hard hit and will need to change.
At the same time, the $3b surplus was almost like a super-emergency cushion for WorkSafeBC.
It’s 130% ratio is supposed to manage a downturn in the economy. But this is unprecedented. It's entirely funded on employer premiums, which are down $400m this quarter based on layoffs.
It’s 130% ratio is supposed to manage a downturn in the economy. But this is unprecedented. It's entirely funded on employer premiums, which are down $400m this quarter based on layoffs.
So WorkSafe has its main revenue source in a state of flux. Who knows what employee claims will be this year.
@jjhorgan has also put WorkSafeBC in charge of biz rules/inspections for COVID-19. May cost more $. Where’s that $ come from? The surplus was the ultimate backstop.
@jjhorgan has also put WorkSafeBC in charge of biz rules/inspections for COVID-19. May cost more $. Where’s that $ come from? The surplus was the ultimate backstop.
Then there’s the idea that WorkSafeBC might have to create a sick-pay program for ppl returning to work in COVID-19 environment if Ottawa doesn’t want to create one. That will also cost major $$. Again, the surplus would have been great to have around.
Anyway, there’s some context to think about on the issue.
Ultimately, whatever the surplus was going to be spent on, one day, would have depended on legislative changes to allow WorkSafeBC to spend it. Right now by law it can’t just be spent on anything. Gov can’t access it.
Ultimately, whatever the surplus was going to be spent on, one day, would have depended on legislative changes to allow WorkSafeBC to spend it. Right now by law it can’t just be spent on anything. Gov can’t access it.
