A NEW YEAR; A NEW LIBERAL TAX GRAB

News:

ST. THOMAS – What would 2013 in Ontario be without another job-killing Liberal government tax grab?  It looks like we will never know as January 1 marked the date when new regulations requiring all self-employed and independent contractors to be covered by WSIB took effect.

Under the new rules, all independent contractors, sole proprietors, and partners working in the construction industry must be covered by WSIB.  In most cases, these individuals already have private insurance that provides better coverage at lower prices. 

“I’ve spoken with a number of tradespeople in Elgin-Middlesex-London who will be hit hard by this new policy,” said MPP Jeff Yurek, “These are hardworking small business owners that form the backbone of our economy yet the government is intent on attacking their livelihood.  One such business owner has figured the new rules will cost 25% of his income, greatly limiting his ability to hire new people and expand.

“I’ve also been informed that many of these contractors only received written notification about the changeover in December of 2012.  This provided insufficient time to provide necessary changes to contracts made for January and February.”

The WSIB has cited increased worker safety and reducing the size of the underground construction market as reasons for this policy.  However, other stakeholders – including the Canadian Federation of Independent Business – have suggested the real motivation is to help cover the WSIB’s $14 billion unfunded liability.

“The logic of the WSIB simply doesn’t hold up,” said Yurek, “Most of these businesses already have private insurance that offers them better coverage than WSIB.  Further, this tax will force businesses to raise prices which will only encourage customers to seek out unlicensed contractors that don’t pay these absurd costs.  Far from reducing it, this tax actually has the potential to expand the underground market.”

In a study conducted by the CFIB, the tax could potentially force 19% of the independent operators in the construction industry out of business.

“Time and again, the Liberal government proves their desire to discourage hard work and harm our economy by attacking small business.”

A petition requesting the abolishment of this tax can be downloaded here.

Background:

  • Bill 119 – the legislation enshrining mandatory WSIB coverage – was introduced by the Minister of Labour at the time, Peter Fonseca, and received royal assent on November 27, 2008.
  • The Ontario Home Builder’s Association estimates that from 2007-2009, the underground construction market cost the Ontario government $1.4 to $2.4 billion in lost revenues and fees.
  • The WSIB intends to charge a set rate on every $100 a contractor earns in gross pay.  Even if after taxes and other costs the contractor loses money on a net basis, they’ll still pay premiums based on gross income.
  • The Canadian Federation of Independent Business survey estimates the new tax will force businesses to raise costs by 70%, cut employee wages by 25%, or result in 19% of contractors going out-of-business.

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Media Contact:
William Ross | M: 647-383-6945 | E: William.ross@pc.ola.org