A recommendation to the Workers' Compensation Act review panel to consider harmonizing the territory's board with British Columbia's doesn't make a lot of sense, says Craig Tuton, chair of the Yukon Workers' Compensation Health and Safety Board (WCB).

'That honestly, quite frankly, shocked the hell out of me,' Tuton told the Star.

In a submission to the review panel last month, the Larger Employer Group, made up of the City of Whitehorse, Northwestel Inc., Yukon Electrical Co. Ltd., Yukon Energy, the Hougen Group, and the Whitehorse Chamber of Commerce, suggested studying joining the Yukon's WCB with another jurisdiction.

'The issue is that the cost of our WCB is rising very rapidly and we must get those costs under control,' said chamber president Rick Karp.

Karp was a key player in deciding to submit the Larger Employer Group document to the review panel after the chamber had already signed a joint submission with other major stakeholders, including the Yukon Chamber of Commerce, the Yukon Federation of Labour and the WCB.

The submission created controversy earlier this month. The seven issues highlighted in the document present recommendations contrary to what was outlined in the joint submission.

The three most contentious issues were in relation to claims' costs and the calculation of wage-loss benefits and the suggestion to harmonize.

In a seven-page discussion, the Larger Employer Group states it is 'reasonable and prudent' for the review panel to investigate harmonizing the Yukon's WCB with a larger jurisdiction such as Nunavut and the Northwest Territories or Alberta.

However, the document clearly favours B.C., providing multiple examples and references to the province's Worksafe B.C. board.

The move may be a necessary measure to stem the rising administration costs of the Yukon's WCB, the document argues.

The territory's administrative costs represent a higher proportion of the overall operation costs than what it does in larger jurisdictions, says the submission, amounting to 33 per cent of costs.

'Harmonization would likely move the Yukon closer to the average,' it says.

But Doug Rody, executive director of the Yukon Federation of Labour, said the board's administrative costs are not unreasonable.

The Yukon has one of the smallest pool of employers, but has an obligation to provide the same level of services as elsewhere in the country, he said.

'So of course, it will be higher than other jurisdictions.'

Rody added he's not convinced harmonizing with B.C. is the way to reduce the average assessment costs.

Research done by the Association of Workers' Compensation Boards of Canada shows between 1984 to 2003, B.C.'s costs were almost consistently higher than the Yukon's. Only in 1986-1988 were they lower.

'The only way to save administrative costs is to close the office,' he said.

He added he suspects harmonization is really a euphemism for contracting out the WCB to another jurisdiction.

The submission by the Larger Employer Group acknowledges the move could mean giving up local control of legislation and policy, but beyond the saved costs, it would provide opportunities for risk pooling to create more rate groups and the ability to tap into the expertise of a larger jurisdiction which may help reduce claims costs.

In essence, it would be creating an economy of scale for the services that are delivered, the submission adds.

'This can be especially important given the trend towards more complicated cases involving diseases, syndromes, stress and other difficult-to-diagnose claims, compared to the physical injuries that were more prominent earlier.'

Currently, the Yukon has only 15 rate groups compared to the more-than 600 in British Columbia. It means that in a situation where multiple workers are injured, the rates are likely to rise in the Yukon. But if joined with B.C., the risk would be more spread out.

B.C. has also recently completed a 'thorough review of its system and has modernized it accordingly,' it states.

The reality is, though, that if the Yukon joins with B.C. , employers and businesses in the Yukon would simply become one of 'hundreds of thousands' and not have their voice heard, said Rody.

'How can the level of services remain the same if you're dealing with Victoria all the time?' he asked.

The proposal also doesn't acknowledge the Yukon's unique legislative or policy needs, said Tuton.

'It doesn't make any sense whatsoever,' he said, adding the costs of making the change would be monumental.

Tuton said he doesn't know where the recommendation came from, but Worksafe B.C. contacted the board soon after hearing about the proposal to see what was going on. The suggestion was a shock to them too, he said.

'It's totally unfounded.'

It isn't the administrative costs that are the problem in the Yukon, Tuton added; it is claims duration and costs.

The average length of a claim in the Yukon is two times longer than the rest national average, said Rody, and that's where the true problem lies.

Claims cost $19.5 million for 2004 $3.8 million more than in 2003.

The average length of time loss claims is 104.1 days. If that average can be reduced by just one day, it would save the board approximately $55,000.

A single claim can cost upwards of $22,500 with the average assessment rate being $2.16 per $100 of payroll.

The Larger Employer Groups submission is 'diverting attention from what is actually important,' said Rody.

It is also beyond the mandate of the review panel, which is meant to look at amendments to the current legislation, he said.

Asking them to completely throw out the act and hand it over to another province, 'that's a little more than an amendment,' said Rody.

But it is only meant as a suggestion for further study, states the document, not a recommendation to proceed.

The Star was unable to reach Brad Cathers, the minister responsible for the Yukon Workers' Compensation Health and Safety Board, for comment.