New WSIB Legislation Concerns Small Business(Queen's Park Report - November 3, 2008) A very contentious piece of legislation was introduced last week by the McGuinty government that should concern any small business operator, especially in these uncertain economic times.
Bill 119, the Workplace Safety and Insurance Amendment Act, will extend mandatory workplace safety insurance coverage to independent operators, sole proprietors, partners in a partnership and executive officers of a corporation carrying on business in construction.
According to the Canadian Federation of Independent Business, the average tax hike on small and medium sized businesses caused by this Bill will be over $11,000 annually. In an economic downtown, what business can afford that?
This is Premier McGuinty’s way of saying happy Small Business Month.
The Bill imposes liability for unpaid Workplace Safety and Insurance Board (WSIB) premiums on people who directly retain a contractor or subcontractor to perform construction work. It also imposes a requirement to obtain a clearance certificate, which is proof of WSIB registration and compliance with payment obligations, before construction work begins, and to retain the certificate for three years.
Luckily, these requirements do not apply to homeowners who retain contractors to do home renovation work; but, if you own a small business watch out because the Bill adds offence provisions to support the enforcement of the mandatory coverage scheme and it will dramatically hike the taxes on your business.
A steady stream of emails has been flowing into my office in opposition to this Bill. One businessperson in Collingwood wrote: “The WSIB mandatory coverage legislation is by far the most detrimental, least thought out, ill-conceived, proposed bill aimed at independent operators and companies in construction. The additional cost (approx $11,000 each) to owners, officers and directors of a small business may very well be enough to drive a lot of businesses further underground and/or out of business. What part of this do the Liberals not get?”
A couple from Elmvale wrote: “This directly affects our ability to continue to operate our businesses as it would require us to pay an estimated $ 22,000 every year. We operate a successful new home construction business in your constituency, and we already are seeing a decline in business as a result of the economy. We already fully report and submit premiums for all of our employees to ensure that they are fully covered. We feel this proposed mandate unfairly punishes those of us who operate our business completely above board, reporting and remitting our entire payroll, income and sales taxes, where those who continue to evade their taxes in our industry still won’t contribute their share under this legislation.”
As you can see, business owners are rightfully concerned. By forcing these small companies to pay additional premiums, the government is leaving many businesses with no choice but to close up shop for good.
That is why I oppose this legislation and why Mr. McGuinty ought to kill this Bill or risk killing small business in Ontario.