Question, Mr. Speaker.

Question is being called. All those in favour? Opposed, if any? The motion is carried.

--- Carried

Motions.

Item 16, first reading of bills.

Item 17, second reading of bills. Item 18, consideration in committee of the whole of bills and other matters: Tabled Document 9-12(2), Strength at Two Levels; Tabled Document 10-12(2), Reshaping Northern Government; Motion 6-12(2), Discussion on Sobriety Clause in Contribution Agreements; Committee Report 10-12(2), Special Committee on Constitutional Reform Report on the Multilateral Conferences on the Constitution; Committee Report 16-12(2), Final Report on the Workers' Compensation Board; Tabled Document 62-12(2) Expo Report, with Mr. Nerysoo in the chair.

To deal with Committee Report 16-12(2), Final Report on the Workers' Compensation Board.

Is that agreed?

Agreed.

----agreed

Committee Report 16-12(2), Report Of The Standing Committee On Agencies, Boards And Commissions On Final Report On Review Of Workers' Compensation Board

Thank you. We will deal with the final report on the Workers' Compensation Board. Mr. Koe, chairman of the standing committee on agencies, boards and commissions, do you have any remarks?

Introduction

We have a couple, sir. The standing committee on agencies, boards and commissions, under the authority given to it by this House, has completed a review of the Northwest Territories Workers' Compensation Board. Throughout the review process, the committee focused on the following aspects: submissions; composition; organizational structure and function of the Workers' Compensation Board; the statutory authorities given to the board under the Workers' Compensation Act; accountability systems within the board infrastructure and the role of the Minister responsible for the Workers' Compensation Board; the organization and operation of the appeals process established under the Workers' Compensation Act; working relationships between the board, the Minister's office, public interest organizations and related departments of the Government of the Northwest Territories; specific matters related to board organization and operation brought to the attention of the standing committee by public interest groups and by individuals; pertinent legislation, regulations and policy; Workers' Compensation Board position on the computation of pension payments for lump sum payout; policy issues surrounding the compensation of aboriginal persons who are injured during the course of, or arising out of, traditional harvesting activities; the adequacy of the years' maximum insurable remuneration; options and strategies for the enforcement of occupational health and safety standards and for the deliverance of effective workplace safety education; and larger issues surrounding the philosophy and fundamental principles for workers' compensation in the Northwest Territories.

The standing committee has met on several occasions during the second session of the 12th Legislative Assembly to consider these subjects. Public hearings were held in Yellowknife on May 11 through 13, 1992. Verbal, written and telephone submissions were received from organizations and individuals involved in the workers' compensation system. The committee wishes to acknowledge the co-operation and thoughtful input received from persons appearing as witnesses or submitting briefs during the public hearings in Yellowknife. In particular, the committee wished to note the prompt and cooperative response provided by the Workers' Compensation Board to requests for information and materials required during the course of the review. It is accurate to note that this review was a launched largely in response to a number of concerns that were raised in public and during the first and second sessions of the 12th Legislative Assembly.

However, it should also be emphasized that the important role played by the government-created boards and agencies across the Northwest Territories requires that the Legislative Assembly take an active role in monitoring, assessing and making recommendations for the enhancement of all agency operations. It is felt that all boards and agencies would benefit from a regular process of review by the standing committee on agencies, boards and commissions regardless of whether concerns or complaints have been raised. On June 18, the standing committee on agencies, boards and commissions tabled Committee Report 11-12(2) which provides an interim report on certain urgent aspects of this review of the Workers' Compensation Board. This final report will deal with the additional issues of concern to the standing committee on agencies, boards and commissions.

The committee's review of fundamental principles underlying the workers' compensation process, recommendations for improving board organization and accountability, and new directions on key policy areas, are provided for consideration by the Legislative Assembly. This report contains commentary and recommendations on policy changes, legislative amendments and/or the need for further study and review. Where recommendations respecting the revision of board policy or procedure are supported by the Legislative Assembly, the expectation is that these should be implemented and that a response will be made according to time parameters indicated by this House.

Certain recommendations deal with prospective changes to the Workers' Compensation Act. In proposing these, the standing committee on agencies, boards and commissions is mindful of the fact that the Legislative Assembly, when reviewing the earlier interim report, has already passed a motion recommending a process for legislative review.

The standing committee's intent in bringing forward recommendations for legislative revision in this final report is not to stifle or predetermine the work of the Minister in preparing, or the findings of other committees which may review forthcoming legislative initiatives outlined in the legislative action paper. However, based on various submissions received during the public hearings, research undertaken at committee request, and an extensive process of discussion and review, the standing committee on agencies, boards and commissions has come to certain conclusions with respect to the need for legislative change. These are reflected in the committee recommendations for specific amendments which might be made to the act. They are offered as a way of allowing this Legislative Assembly to debate key elements of the board's statutory framework and through a motion of the House provide guidance to the Minister, which may assist in preparing the legislative action paper. In some cases, the standing committee on agencies boards and commissions carried out in-depth consideration of certain matters, but was unable to bring its examination to conclusion. Where these relate to amendments in the legislation, the standing committee has recommended that further review be carried out by the Minister or the board and that a prospective position be outlined in the legislative action paper.

It is hoped by the standing committee on agencies, boards and commissions, that this final report will offer not only a fresh and practical view of the important role which is played by the Workers' Compensation Board, but also offer new concepts and proposals that may prove helpful in providing a framework which best meets the needs of workers injured in the Northwest Territories.

General Observations And Recommendations

Fundamental Concepts

Reference is often made to the basic principles of the workers' compensation system in Canada. Throughout its review of the Northwest Territories Workers' Compensation Board, the standing committee on agencies, boards and commissions attempted to keep these principles in mind and to consider the relevance for the Northwest Territories today. Much of the basic framework for contemporary systems of workers' compensation in Canada dates back to the early 1900s. In 1913, the Hon. Sir William Ralph Meredith produced a report for the Province of Ontario in which he set out a series of principles for laws relating to the liability of employers. These have become known as the Meredith principles, and still form the basis of workers' compensation across Canada. Simply stated, the Meredith principles are:

1) The liability of employers for injuries in the workplace should be collective rather than individual, with employers paying into a central fund used to pay benefits to injured workers;

2) The benefits payable to injured workers must be

guaranteed in the legislation;

3) In return for guaranteed compensation, workers have no legal right to sue their employer or co-workers for negligence resulting in a workplace injury. This is the historic compromise of the workers' compensation system;

4) The workers' compensation system is a no-fault system;

5) The system should be administered by a body independent of government with equal representation from labour and industry and a neutral chair; and

6) The board must have judicial-like authority for making final decisions on claims for compensation without an appeal to the courts.

In Canada, workers' compensation has become generally recognized as a system of social insurance. Coverage is usually compulsory and funded through assessments levied upon employers. The funds collected through this levy are then gathered into a common pool out of which benefits are paid to workers disabled as a result of their employment. In all Canadian provinces and territories, the administration and adjudication of claims is carried out by a corporation known in most jurisdictions as a Workers' Compensation Board. Across the country, benefits are considered to be payable whether or not the employer is at fault for the injury, and, generally, they are payable without regard to the fault on the part of the worker.

During its review of the Workers' Compensation Board in the Northwest Territories, the standing committee on agencies, boards and commissions was impressed with the fact that so much of the input received from public interest organizations focused on some of the most basic principles of the workers' compensation system. Submissions dealt with such matters as the nature of representation by labour and industry, the independence of the board from government, employer's option to seek individual liability coverage as opposed to the collective system provided under the Workers' Compensation Act, parameters surrounding third party liability issues, and even a question of who should be considered a worker.

One of the central questions facing the standing committee on agencies, boards and commissions quickly became whether or not the standard Canadian framework for workers' compensation is best suited to the needs of the Northwest Territories in the 1990s. The standing committee noted that there seems to be little or no trend across the country to move away from the basic principles that have defined Canada's system of provincial and territories workers' compensation coverage for the past 80 years.

However, it is true that times have changed to some degree since Justice Meredith brought forward his report on legislative principles. For instance, the range and scope of personal and corporate insurance have broadened somewhat, and, in some jurisdictions, provincial governments have become involved in the direct delivery of social insurance schemes. The principle that the injured worker can be best served by compulsory no-fault group coverage administered by an independent body may not be as true today as it was in 1913. As the workplace has become more sophisticated, questions have been raised as to what sort of situations should be covered as workplace injuries. With the emergence of organized labour in Canada during the 1930s and 1940s, it has assumed a spokesperson role for workers and most workers' compensation systems. It is more difficult now than ever before to identify how to ensure adequate representation for both organized and unorganized workers within the structural framework of workers' compensation boards. Not withstanding the fact that some of the context may have changed since the Meredith principles were first stated, workers' compensation systems have not deviated much from them. Certainly, to depart too much from these principles could well throw the delicate legislative and administrative framework for workers' compensation out of balance.

However, there are a number of additional principles that have been accepted as important basics within some provincial or territorial compensation schemes for workers. Benefits must be adequate for injured workers to maintain a lifestyle which approximates the one they had prior to their injury. Benefits must be guaranteed even in times of workplace crisis or catastrophe. Mechanisms should be in place to minimize delays, costs and friction between employers and workers. Legislation and policy governing the workers' compensation system should be understandable and accessible by the public. Decisions of the board administering workers' compensation should be generally in sync with the aspirations and perspectives of the general population, and there is a need for accountability systems to ensure that operational policy complies with statutory provisions and to maintain an acceptable level of administrative service.

Finally, there are some considerations about workers' compensation in the Northwest Territories that are not present elsewhere in Canada. Time lines for submissions of claims and other information have to be tailored to account for vast geographic differences within the jurisdiction. A proportion of non-resident claimants is much higher in the Northwest Territories than in other jurisdictions. This creates special challenges for the administration of claims, appeals and rehabilitation programming. Certain sectors of the northern economy are particularly susceptible to cycles of boom and bust, affecting employers' assessments from one year to the next. At certain times in the past, and quite likely this will be repeated again in the future, the devolution of programs and services to territorial authority has resulted in wild variation in the amount of assessment income realized by the Workers' Compensation Board. Major workplace sectors in the Northwest Territories are particularly susceptible to catastrophic accidents potentially capable of decimating the accident fund. Workers' compensation systems are based largely on features of a wage economy. This makes it very difficult to apply general principles to occupational groups which combine resource harvesting with traditional subsistence patterns. The communication of workers' compensation information decision and policy consultation must take the multi-lingual nature of the NWT into account. Investment of WCB funds should take into account its responsibility as a corporate citizen of the Northwest Territories to support northern development. Longrange planning for management of WCB funds must take into consideration the realities of territorial division and the evolution of Nunavut. The workers' compensation system which emerges for the NWT must find some way of combining these considerations with the basic building blocks that have formed the framework for workers' compensation since the concept took form in 1913. To a significant extent, this was much of the challenge that faced the standing committee on agencies, boards and commissions during its current review of the territorial Workers' Compensation Board.

Frequently during its public hearings, the standing committee heard submissions from employers, affiliations and organized labour that suggested that input into decisions about the administration of the workers' compensation system should be confined to the stakeholder groups. These were generally defined as the people who pay into the system, the employers, and the people who take money out of the system, the workers. More often than not, the workers were assumed to be represented only by organized labour.

The standing committee on agencies, boards and commissions did not accept that viewpoint. In contrast, Members of the standing committee believed that there should be an increased recognition of the fact that everyone who works and lives in the NWT is, to a degree, a stakeholder in the workers' compensation system. Everyone in the NWT benefits from the workers who provide us with goods and services and are able to go about their responsibilities with a sense of confidence in their security. Everyone is affected by the manner in which assessments influence both costs and salaries. Should there be a situation which administrative decisions within the Workers' Compensation Board result in a shortfall that prevents a payment of claims, the Workers' Compensation Act would allow the consolidated revenue fund of the GNWT to be used to shore up the accident fund. This, of course, would allow the use of public funds.

There is an additional factor which makes the general public of the NWT a major stakeholder in workers' compensation issues. One of the measures of the qualities inherent in a society is the extent to which the society cares for injured and disabled people. The manner in which injured workers are treated within the NWT says something about all of us. The standing committee on agencies, boards and commissions felt that this was an important point that should not be overlooked. In that respect it was noted on some occasions during public hearings that the Workers' Compensation Board of the NWT lacks sensitivity in meeting the needs of injured workers. This, if true, would be an unacceptable condition. Where perceptions of insensitivity to injured workers persists, the standing committee found them to be related directly to the inadequacies of the policy and legislative framework in which a board operated. This was conveyed clearly and well during the committee's public hearings by the chairman who pointed out that: "In listening to a number of the concerns that were expressed and in reference to the insensitivity involved, I found that much of it dealt with more of an insensitive policy, provisions of an act that is outdated and does not meet the requirement and the needs of the injured workers. I think this got turned into the fact that our staff are insensitive and that simply is not the fact."

These comments are underscored by the findings of a client service audit completed by the board in February 1991 which reported that, on balance, most of the problems that clients identify suggest that WCB personnel are willing and anxious to provide good service, but are hampered by policies and procedures which are unclear, contradictory or which may make sense, but where the WCB has failed to take the time and effort to train its personnel.

The standing committee on agencies, boards and commissions concurs with these assessments. Clearly, the focus for change within the workers' compensation framework must be placed on an updating of the legislation and policy upon which it operates. This is necessary not only from an administrative point of view, but because it will free the well qualified and dedicated staff that work at service delivery levels to maximize their existing willingness to meet the needs of their client groups.

The standing committee, upon its review, is of the opinion that in many ways the service provided by the Workers' Compensation Board has met the needs of employers and workers. The fact that this jurisdiction is one of only three boards in Canada to maintain a fully funded status accepted, at least to some degree, is an illustration of the administrative competence of the board and its staff. As well, recent initiatives of program and service evaluation within the board have demonstrated a commitment to quality service.

However, the standing committee also heard a convincing body of evidence which indicates that many injured workers served by the Workers' Compensation Board are experiencing difficulties. The pain apparent in their situations, the sense of frustration with the board's decisions on claims, and incredible pressure under which these people must meet the requirements of day-to-day living, was undeniable. Clearly, there is a need to ensure that their welfare is not overlooked.

The standing committee became increasingly concerned about the frequency with which it heard the perception that the internal focus of the board has shifted too far toward financial wardenship and too far away from insuring that an understanding, accommodating image is presented to its constituent public with emphasis on strict policy interpretation, curt and legalistic language in its correspondence, an office environment which appears sterile and daunting. These may all be elements that create a sense that the board is detached and high-handed. Even claimants who find the board staff to be pleasant and courteous, have expressed frustration at their inability to explain a rationale for board policy and procedure. A segment of the claimant population seems to feel that organizational culture within the Workers' Compensation Board is dehumanized, unresponsive and even adversarial.

The committee noted that consultation with injured workers on policy formulation issues has not been a high priority. Levels of community consultation have been inconsistent as well, particularly outside the relatively narrow circle of groups identified as primary stakeholders. Confusion and suspicion appeared to have existed for some time with regard to this agency's relationship with the Minister and the Legislative Assembly. There has been a disregard for the benefits of establishing a regional presence.

Accordingly, the ABC committee concluded that there is a range of issues which may relate to the manner in which the board is organized and operates, to its relationship with the Minister and the Legislative Assembly and certain policy issues which require immediate review. These will be the focus of the remaining sections of this report.

Year's Maximum Insurable Remuneration

When the standing committee on agencies, boards and commissions tabled its interim report on June 18, 1992, the Legislative Assembly supported a recommendation that the Workers' Compensation Act should be amended to increase the year's maximum insurable remuneration, YMIR.

The standing committee has noted the prompt attention of the Minister responsible for the Workers' Compensation Board in bringing forth a bill which would affect an increase in the YMIR by amending the Workers' Compensation Act. It is hoped that the government will not stop there and that there will be an ongoing process through which adjustments can be made in the YMIR to reflect the economic conditions of our time.

Section three deals with the legislative review.

A Full Legislative Review

It was felt that this process would provide an unprecedented opportunity for public input into the composition of the territorial Workers' Compensation Act and underscore that responsibility for the legislative framework lies with the elected Members of the Legislative Assembly. To assist the review process, the standing committee on agencies, boards and commissions is also proposing several additional recommendations for amending the Workers' Compensation Act,

Mr. Chairman, I have asked other committee Members to continue with the report and I will ask, if I may, Mr. Lewis to continue.

Thank you. Mr. Lewis.

Board Organization And Structure

There are four recommendations in this section, so we may not have a quorum when we get to the motions. In keeping with the mandate given to it by the Legislative Assembly, the standing committee on agencies, boards and commissions reviewed implications arising from the organization of the Workers' Compensation Board and considered options through which the board structure could be enhanced. As a general observation, the standing committee was concerned that the sphere of influence that has surrounded the board's operational decision-making and strategic planning has become narrowed and not reflective of the entire Northwest Territories.

There is a sense in some quarters that the board should be responsive to, and representative of, only certain employers' associations and organized labour who see themselves as the exclusive stakeholders in the workers' compensation system. While these public bodies purport to represent the interests of member disciplines throughout the Northwest Territories, the standing committee was concerned that the perspectives of unorganized workers and of employers who are not closely affiliated with the larger industry associations must not be lost. Typically, the best way to broaden the frame of reference for any board is to ensure that the structure for membership composition allows for the appointment of various interests and viewpoints.

The standing committee on agencies, boards and commissions was of the opinion that the operation of the Workers' Compensation Board would be greatly facilitated by ensuring that its membership composition should reflect our diverse cultural and regional interests. Currently, this breadth is lacking. The majority of members have been resident in Yellowknife and the board has devoted little time or energy to interfacing with the people and communities of other regions,

The standing committee became aware that a body of opinion exists which suggests that there is no benefit to ensuring adequate regional, women's or aboriginal representation. During the public hearings, for instance, Members of the standing committee listened carefully to a presentation provided on behalf of a group calling itself the Northern Employers' Council on Workers' Compensation. This group took the position that: "The drive to make board appointments based on political considerations of ethnicity, regionalism or gender can result in a board lacking the skills and understanding to adequately perform its duties. We cannot support such appointments."

The standing committee on agencies, boards and commissions rejects this position completely. Such a statement conveys the thought that decisions to appoint persons who bring an alternate perspective are born from political motivations only. It devalues "skills and understanding" of persons appointed because they represent regional, aboriginal or women's perspectives. To the contrary, Members of the standing committee on agencies, boards and commissions believed that the understanding, skill and especially the creativity of the Workers' Compensation Board would be enhanced by a wider range of perspectives and backgrounds.

It is, of course, necessary to ensure that the valuable perspectives of the various industry associations and organized labour continue to be represented within the membership framework of the Board. Indeed there is much merit to amending the Workers' Compensation Act to require that a proportion of the board is recommended by industry groups and an equal proportion is recommended by organized labour. But, at the same time, some way must also be found to broaden the composition of the board to reflect the full richness of our northern society.

The standing committee on agencies, boards and commissions was concerned that there is not presently room within the five-member structure to ensure that a variety of perspectives can be represented. It was felt that, if the board was established as a nine-member body, there would be additional opportunity for successive members to make appointments reflective of a broader range of interests.

Motion To Accept Recommendation 1, Carried

I move, Mr. Chairman, that the Workers' Compensation Act be amended so that the board will be composed of: a) two directors appointed by the Minister on the recommendation of organized labour; b) two directors appointed by the Minister on the recommendation of the representatives of employers; and c) five additional directors appointed by the Minister, one of whom is to be appointed by the Minister as chairperson of the board.

That is the motion under recommendation 1, Mr. Chairman.

Thank you. The motion is in order. However, we cannot proceed until we have a quorum. To the motion. As I indicated, the motion is in order.

Question.

Question has been called. All those in favour? All those opposed? The motion is carried.

---Carried

Mr. Lewis.

Thank you, Mr. Chairman. If adopted, this revised structure would result in a nine-member board. It would also provide a statutory requirement that the Minister

responsible for the Workers' Compensation Board should make appointments which represented the interests of organized labour and industry associations. At the same time, it would provide for a chairperson independent of those interests, and that ample opportunity for the appointment of individuals capable of representing a variety of northern perspectives. It would also allow the Minister to appoint individuals who could offer certain specific skills or background knowledge required by the board for efficient operation at that point in time.

I come to the second recommendation, Mr. Chairman. To clarify the intent of the expanded membership and as guidance for decisions surrounding board appointments, I move the following motion:

Motion To Accept Recommendation 2, Carried

I move that the Minister appoint four of the additional directors of the board according to criteria that will establish a full cross-section of background and opinion on the board, including but not limited to, regional representation, representation of both genders and representation of aboriginal perspectives.

The motion is in order. To the motion.

Question.

The question has been called. All those in favour? All those opposed? The motion is carried.

--- Carried

Mr. Lewis.

Thank you, Mr. Chairman. The standing committee was also aware that smooth operation within the board depends on continuity of membership. Historically there have been periods when all appointments have been due to expire concurrently. A wholesale turnover of board members is not in the best interests of the organization. Should board members reach a point in their tenure when they become better suited to meet challenges elsewhere, the organizational framework should provide the Minister with the ability to not renew their appointments, while still maintaining confidence in the continuity of the board. This can be achieved by staggering the appointment dates so that board members' terms overlap each other. It is unnecessary to reflect this practice in legislation, but rather for the Legislative Assembly to provide it as a general principle to be followed by the Minister responsible for the Workers' Compensation Board. Therefore, the third motion, Mr. Chairman:

Motion To Accept Recommendation 3, Carried

I move that the Minister responsible for the Workers' Compensation Board make appointments so that no more than 50 per cent of the members' terms will expire in any one fiscal year.

Thank you. The motion is in order. To the motion.

Question.

The question has been called. All those in favour? All those opposed? The motion is carried.

--- Carried

Mr. Lewis.

The standing committee on agencies, boards and commissions spent some time reviewing the role of the chairperson of the Workers' Compensation Board. The committee was interested to note that the final report of the 1989 review committee recommended, and I quote, that the position of the chairman be maintained as a full-time position for the first year, but that the new incumbent reduce his involvement over the next three years so that position can be performed on a part-time basis. The 1989 review committee also recommended that at the end of the chairperson's three year term, the Minister re-assess whether the position should be full or part time.

In its response to these recommendations, the Workers' Compensation Board indicated that the concept is an acceptable goal and it will be reviewed annually.

The standing committee on agencies, boards and commissions is of the opinion that the 1989 review committee's recommendations were well reasoned and appropriate at the time in which they were made. The role of the chairperson should never have been intended to evolve into a full-time permanent senior official. However, the stressful transition period in which the agency found itself in 1989 necessitated that the chairperson assume a full-time role to assist the general manager. Unfortunately, there is still a sense of transition which may, for the time being, require an additional period of full-time involvement and leadership by the chairperson. The Minister should assess whether or not the full-time services of a chairperson will be required over the course of the next year to 18 months. If so, this involvement should be scheduled to revert to a part-time position by the time a comprehensive amendment to the Workers' Compensation Act have completed all stages of review and passage, some time early in 1994.

Beyond meeting these short term operational needs, there should be no mistake that the position of chairperson on the Workers' Compensation Board should remain a part-time commitment. For that reason, the standing committee on agencies, boards and commissions is of the opinion that the act should stipulate that the chairperson is to serve a part-time function with the board. And so I come to the final recommendation of this section, Mr. Chairman.

Motion To Accept Recommendation 4, Carried

I move that the Workers' Compensation Act be amended to specify that the chairperson's duties will be equivalent to that of part-time employment.

Thank you, Mr. Lewis. The motion is in order. To the motion.

Question.