Employers in Canadian provinces will pay steady to lower premiums for workers compensation insurance this year, although concerns persist about Quebec's program despite a second consecutive rate reduction.

Quebec's workers comp system has eliminated a deficit that had ballooned to $2.3 billion Canadian ($2.29 billion) and forced substantial premium increases from 2002 to 2006. The program now has a roughly $1 billion surplus due to good investment returns and greater employer premiums. In response, the provincial board has lowered this year's average employer premium by a dime to $2.14 Canadian per $100 Canadian of insurable earnings on top of an eight cent reduction last year.

Although the system is going in the right direction, Quebec employers still feel their premiums are too high, said Simon Prevost, the Montreal-based vp, Quebec, for the Canadian Federation of Independent Business, which represents more than 100,000 small to midsize employers across Canada. "It's one aspect that our members are still not happy about," he said.

While Quebec employers are pleased that the deficit has been eliminated, they remain concerned about the high level of benefits for injured employees, he said.

Eliminating the deficit "is the only good thing really," Mr. Prevost said.

Canadian workers comp coverage is provided largely by provincial and territorial workers comp boards and financed by employer-paid premiums set by the boards. Rates for each company in a given sector reflect the loss experience of that sector, though companies with low incident levels are eligible for individual rebates.

In Ontario, employer premium rates held steady at $2.26 Canadian per $100 Canadian of insurable earnings even though the provincial workers comp system has a $6.5 billion Canadian ($6.49 billion) deficit. Ontario employers are concerned that an amendment to the provincial workplace safety law that increased compensation for injured workers receiving partial benefits and allowed workers who are physically able to return to work to continue receiving benefits if they cannot find suitable employment will lead to higher rates in the future (BI, April 16, 2007).

The western provinces, meanwhile, have been extremely successful in reducing their workers compensation costs, said Laura Jones, vp, western Canada for the CFIB in Vancouver. Employers would like to see the boards reduce administrative hassles in processing workers comp coverage, but are pleased they have the lowest employer premiums in Canada, she said.

"In terms of the rating, things look very good right now across the west," Ms. Jones said. "The boards are in pretty good shape."

In Alberta, employers pay the least of any province at $1.32 Canadian per $100 Canadian of insurable earnings for their workers compensation coverage, down 11 cents from last year. It is the fourth straight year that premiums have declined amid good investment returns and an aggressive program aimed at decreasing injury rates and duration with built-in rebate or discount incentives for employers to improve workplace safety.

Alberta employers say they have been rewarded for taking initiative to improve workplace safety.

Mammoet Canada Western Ltd. has been cited by workers comp officials for having one of the best safety records of Alberta employers due to a comprehensive program that emphasizes thorough training, constant reviews to ensure that employees have the proper equipment and field-level risk assessments, said Rick St. Pierre, health and safety manager for the Edmonton-based heavy equipment and related services company. In addition, management and supervisors are required to complete independent health and safety courses while employees are required to show they are certified to use the equipment before they are allowed to operate such machinery, he said.

The company's units have received a 38% to 40% discount on their workers compensation rates, Mr. St. Pierre said.

The only Canadian employers to pay higher premiums this year are those based in the sparsely populated Yukon Territory, where the workers comp board has been gradually phasing out its subsidy program.

The subsidies began in 1999 when the workers comp program featured a substantial surplus, but rising claims costs and lower investment income forced the board to phase out the subsidies.

The average employer premium in the territory has risen from $1.74 Canadian in 2005 to $2.94 Canadian this year. Prior to the increases, the Yukon--population 31,100--had the lowest employer premiums in Canada.

"That's the one exception in western Canada," Ms. Jones said. "It's definitely something that our members up there are concerned about and would like to see come down."

CFIB has about 200 employer members in the Yukon, she said. Stakeholders are beginning to discuss the need to evaluate potential solutions, such as consolidating the system with the other territorial workers comp system of the Northwest Territories and Nunavut or perhaps one of the provinces to better spread the risk, she said.