WSIB to blame for 'glitch' — City still responsible for shortfall

The Workplace Safety and Insurance Board acknowledges an "internal error" in its system is responsible for the City of North Bay's $825,000 budget shortfall.

The City of North Bay is among the "less than one per cent of employers registered with the WSIB,"affected by the error, confirms WSIB Public Affairs Manager Christine Arnott.

The WSIB rate statement "glitch," was the term used to explain the shortfall in the 2021 budget by Deputy Mayor Tanya Vrebosch in a Wednesday special committee meeting.

See original story: 'Glitch' leads to $800K budget shortfall

"During the preparation of annual premium rate statements, the WSIB discovered that a small number of employers inadvertently received the wrong rate for 2020 due to an internal error related to the transition to our new rate-setting model," writes Arnott in correspondence with BayToday.

The shortfall is unwelcome news for taxpayers and for a Council and finance staff that seemed on track to pass the 2021 budget next week. To give CFO Margaret Karpenko and her team time to examine solutions to address the WSIB shortfall, the budget timeline has been pushed back. The revised plan is to hold a special committee meeting Jan. 4, 2021, to learn of finance staff's findings with an aim to pass the budget the following Tuesday.

During Wednesday's meeting, Karpenko indicated she had only received the letter notifying the City of the error days before. The CFO further explained a notice from WSIB received in the spring showed the City's rates had dropped to $1.97 per $100 of insurable payroll.  The most recent notice advises the rates should have remained at $4.41 per $100 of insurable payroll all along, leading to the shortfall.

Arnott advises WSIB has "reached out to those employers, including the City of North Bay, to address the error and will also hold 2021 rates steady at the corrected 2020 rates."

The concern for finance staff is the long-term effect of using more reserves to mitigate the WSIB issue.

The WSIB change "is not just a one year thing," advised Vrebosch, "it is ongoing money, so it's not something where it's a one-time use of reserves and off the books the next year. And, there's a phase-in of WSIB over the next couple of year that can impact us," as WSIB rates could rise another five per cent over the next few years.

Figuring in the effect of the higher WSIB rates on the police budget and the general budget, the levy increase for 2021 now stands at 4.22 per cent or 3.83 per cent after growth, up from the 3.36 per cent or 2.97 per cent (after growth) increase on a $97 million levy.