Building Magazine


Mandatory WSIB coverage combats the underground economy

Ontario’s recent change to make Workplace Safety and Insurance Board (WSIB) coverage mandatory in the construction industry is being done to, among other reasons, combat the pervasive underground economy, says the Ontario Construction Secretariat (OCS).

As of January 1, 2013, almost every construction worker in the province of Ontario is required to be covered by the WSIB, a move that closes a loophole that allowed many contractors to style their employees as independent contractors.

“Before mandatory WSIB coverage, many Ontario construction workers were able to not only evade their taxes which fund important public services, but to also avoid making contributions to the funds that compensate injured workers,” says Sean Strickland, Chief Executive Officer of the OCS. “By closing this loophole, the government has taken an important step in prohibiting the underground economy in Ontario construction.”

The OCS has conducted several studies on the underground construction economy in response to growing concerns expressed by contractors and construction unions.

These studies provide evidence that:

  • Underground construction activity amounts to between $1.4 billion to $2.4 billion in evaded taxes and WSIB fees, funds that are being siphoned away from public services at hospitals, schools, and injured workers’ medical expenses;
  • Classing employees as ‘independent operators’ provides contractors with an unfair and illegitimate competitive advantage ranging from 20 per cent to 50 per cent of labour costs; and
  • The underground economy undermines the coverage of benefit plans and weakens support for apprenticeship and training.  By shifting costs onto others, the underground economy increases the operating costs of workers and contractors who follow the rules. 

The WSIB has developed a website to provide information for construction employers on mandatory coverage:

1 Comment » for Mandatory WSIB coverage combats the underground economy
  1. Kathy Wilson says:

    You know in 2002 when WSIB told me that this was going to become a law in 2004. I started calling OHBA AND CHBA and all of them said to me “the Government will never do this to small businesses” In 2004 to present date the Auditors are out in full force both from WSIB and the CRA (and many were asked for by the Ontari-OWE Liberals) Legit small businesses in construction are NOT the underground and to penalize the Owner (whom btw has better Liability, Disability, Private insurance that covers us for all of our NEEDS 24/7) this is a ram and scam tax and clearly an EXTORTION on Small businesses in the industry whom OPENED BY LAW, RAN BY LAW (until this ram and scam Bill 119 and Bill 183)

    Legit businesses were covered and have NEVER claimed an accident yet on even their own private insurance they carry. Whom gives you the right to speak about all I/O’s as being underground?

    UNIONS were allowed to speak on this bill yet the 1,000’s upon 1,000’s of small LEGIT business owners were NOT allowed to speak on the Bill 119 and Bill 183.

    Do you also condone UNIONS now impeding on our worksites? Do you also condone the constant harassment on our telephones? Do you also condone that the WSIB, UNIONS and now the Mafia breaching our Privacy?

    Shame on you for lumping those of us who opened LEGIT businesses and by the way, when my husband started his business their was NO insurance to cover Private LEGIT small businesses in Construction for Disability. In fact, I wrote ours and sent it to the Insurance firm that would look at it. THAT IS WHAT A LEGIT RESPONSIBLE BUSINESS DID FOR THIS INDUSTRY! We were (past tense…do you see that) covered 24/7 for anything, heart attack, surgeries, nail through thumb, arm amputated, you name it, we are covered.

    My husband had to have knee surgery, the Insurance company paid him part time for months leading up to awaiting surgery (so that we could keep the business going, as he still went out and did quotes and had workers WORKING) He was also paid for FULL MONTHS of his recovery, was helped with physiotherapy, and back to work FULL TIME in 3 MONTHS. With WSIB we will never be paid any monies and that has been proven since my talks with Legal Departments at the past Dolton McGuinty and the newest mini me Premier!

    We also carried (past you see that?) HEFTY Liability insurance and other Insurances that were geared to our businesses, again this is what RESPONSIBLE BUSINESSES DO! Apparently true facts that we were never given the opportunity to speak on!

    Very disappointed in your slanted version that all Independent Operators are the ‘underground’ We worked with local schools when students were considering Construction to show them the industry..the Government Squashed that now also! Our, well my advice to the young students was stay in school, get an education and do not choose to be a PRIVATE LEGIT SMALL BUSINESS IN CONSTRUCTION… you will work every weekend, you will be raped and pillaged by the Government of Ontari-OWE. Year end, you will see you’ve paid out 85% in taxes so making $15.00 bucks an hour. Now with the other taxes (2015) coming in, legit small businesses who are still trying to survive will DIE!

    Kudo’s to you for working against Small Legit Businesses in Construction who very much ran aboveboard. You slanted and demeaned each and every one of us. Those, whom by the way, work for Contractors and Builders (NOT JUST ONE – but several)

    Appalling! You owe LEGIT businesses who were killed on your and UNION’s and Mafia perspectives an apology for lumping us in to fill your agenda.

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