July 23, 2026

Mr. Jeffery Lang President and CEO WSIB
200 Front Street West
Toronto, ON M5V 2J1

Dear Mr. Lang:

Re: VFMA and SIEF “wind down”

This is in response to the WSIB’s decision to “wind down” (i.e. eliminate) the Second Injury Enhancement Fund (SIEF) policy as first communicated on July 16, 2026.

The WSIB’s communications state that the decision to eliminate SIEF cost relief is based on a finding that a recent value for money audit (“VFMA”) found that the SIEF “program:”

• “no longer supports it’s intended purpose of removing employment barriers for people with pre-existing disabilities or supporting the return-to-work and recovery outcomes injured people need and

• no longer provides meaningful or equitable cost relief to businesses as it has not kept pace with changes to how claims and premiums are managed as it has not been meaningfully updated since its introduction in 1945.”

We find that the VFMA, the results of which led to the decision to eliminate SIEF cost relief, is based on inaccurate and irrelevant information and ultimately, does not cite or contain objective and relevant evidence to support the WSIB’s decision. Our reasons follow.

VFMA IS BASED ON AN OBJECTIVE NOT ARTICULATED IN THE SIEF POLICY

Since September 1991 and through to July 16, 2026, the SIEF policy stated the following in regard to its objectives:

“The objectives of this policy are to provide employers with financial relief when a pre-existing condition enhances or prolongs a work-related disability. It thereby encourages employers to hire workers with disabilities.”

The VFMA states in part the following (emphasis added):

• “The SIEF’s purpose, informed by the policy, is interpreted and perceived differently by the WSIB and external stakeholders, including employers, employer representatives, and labour representatives.”

• “WSIB emphasizes that the intended purpose of the SIEF policy is to reduce barriers to employment for workers with pre-existing conditions. While not stated in the SIEF policy, the SIEF has informally been referenced by the WSIB to support return-to-work outcomes in alignment with the WSIB’s broader objectives of supporting safe return to work.”

The VFMA states that the SIEF policy has not been “meaningfully updated.” It is not clear what is meant by “meaningfully.” The policy has been revised/updated on at least four occasions since 1991. Prior updates/revisions to the SIEF policy – which were not meaningful according to the VFMA – were approved by the Board of Directors or with reference to an administrative minute. The most recent revision/update to the policy has the effect of retroactively eliminating SIEF cost relief for requests made on/after June 16, 2026 (i.e. a significant change to say the least). The July 16, 2026 policy revision, the most significant one in over three decades, was approved by the President and CEO with no reference to Board of Directors or administrative minutes.

The VFMA acknowledges that the WSIB’s current viewpoint regarding the purpose or objective of the SIEF policy is “not stated in the SIEF policy” and thus, does not reflect the purpose/objective of the SIEF as articulated in the policy since 1991. Consequently, the VFMA was asked to assess the SIEF policy from the perspective of the WSIB’s current viewpoint of the objective of the policy, rather than the stated objectives as articulated in the policy itself for over three decades. This reflects a significant flaw from the starting point of the VFMA in its assessment of the SIEF policy.

The WSIB’s Code of Business Ethics refers to accountability, serving with transparency and respect. It is unclear how a policy objective, in place since 1991, was not the objective considered by the VFMA but instead, a non-policy objective was the focus of the audit. It is also not clear why the SIEF policy “winddown”, communicated on July 16, 2026, was applied retroactively to June 16, 2026. None of these WSIB decisions reflect the WSIB’s Code of Business Ethics which include transparency, accountability and presumably, fairness to employers who fund the system.

Words have meaning. The objectives of the SIEF policy are those that are stated within the policy and can be reasonably inferred from the text within that policy. We find that the “objectives” of the SIEF policy are two-fold, and agree with the reasoning and succinct findings in WSIAT Decision 2970 18 which stated, in part, the following:

“Objectives of the policy are best read as two separate objectives:

one being to provide employers with financial relief when a pre-existing condition enhances or prolongs a work-related disability, and the other being to encourage employers to hire workers with disabilities.

(Tribunal Counsel) submits that it is also unclear why the stated objectives of the policy do not include providing financial relief to employers when a prior disability causes or contributes to the compensable accident. However, this is clearly something the policy also aims to achieve as noted in the policy statement at the beginning of the policy document. (Tribunal Counsel) submits that providing financial relief to employers when a prior disability causes or contributes to the compensable accident should also be considered an objective of the policy, although it is not explicitly stated as an objective in the Discussion Paper.”

Moreover, we find that the WSIB’s interpretation or stated objective of the SIEF policy cannot be reasonably inferred from the policy itself. For example, the SIEF policy defines a pre-existing condition (PEC) as “an underlying or asymptomatic condition which only becomes manifest postaccident.” Given this policy definition, an employer would not know that the worker had a PEC at the time of hiring as it is “a condition which only becomes manifest post accident.” In light of this, it is unclear how the WSIB concluded that the objective or purpose of the SIEF policy is to reduce “barriers to employment for workers with preexisting conditions.” The WSIB appears to conflate the terms “preaccident disability” (defined in the SIEF policy as a “condition which has produced periods of disability in the past requiring treatment and disrupting employment”) and “pre-existing condition.”

In conclusion, the objectives of the SIEF policy have been articulated in the SIEF policy since 1991. Those objectives (clearly stated and inferred as outlined above) were not put to the test by the VFMA. What was put to the test by the VFMA is the WSIB’s interpretation of the SIEF objectives which are not found in nor inferred from the SIEF policy as acknowledged by the VFMA itself. Accordingly, it is not unreasonable to conclude that the VFMA was an expensive exercise in futility.

THE NEW RATE FRAMEWORK AND SIEF

The VFMA states the following:

“The new rate framework introduced in 2020 was designed to increase premium rate fairness, stability, and predictability based on each employer’s risk and claim experience in order to drive a more transparent and understandable rate framework. However, sample analysis demonstrates instances

where the SIEF is not aligned with the new rate framework as it is currently structured to provide cost relief to employers as it did under the previous experience rating framework. Moreover, due to challenges in calculating cost relief realized through the SIEF, fairness and transparency is not consistently experienced by all employers.

Overall, findings of this audit indicate the SIEF no longer aligns with the WSIB’s originally stated objectives and may no longer deliver the same level of impact to employers and workers as it did at the program’s inception or prior to the introduction of the WSIB’s new rate framework.

Leading up to the introduction of the new rate framework in 2020, it was recommended to discontinue the SIEF program because of the new rate framework’s emphasis on better managing fluctuations in employers’ premium rates to enhance fairness, as well as a perceived shift away from the SIEF’s original objective of addressing employment barriers.”

The VFMA describes the new rate framework as “based on each employer’s risk and claim experience.” This infers that the new rate framework is based on elements that the employer has or should have control of. However, the employer has no control over pre-existing conditions which adversely impact their claim costs. As such, it is not clear how the elimination of the SIEF policy would align with the new rate framework.

Observations listed in the VFMA regarding the “impact and outcomes of the SIEF” since the new rate framework include the following (emphasis added):

“Program reviews of the impact and outcomes of the SIEF since the new rate framework was introduced is carried out intermittently, rather than continuously.

• O3.2a: The latest review completed in March 2025 measured outcomes of the SIEF under the experience rating framework and new rate framework but not impact of cost relief on employers as a result of the SIEF.

• O3.3: SIEF performance measurement does not include monitoring or communicating the volume of SIEF claims that may not impact the employer’s premium rate calculation, either as a result of not meeting the minimum requirement to move in the risk band or reaching the maximum volume of SIEF decisions.

• O3.3a: The WSIB does not proactively communicate the impact of a specific SIEF decision on the employer’s risk band movement or premium rate calculation making it difficult for employers to understand the value a SIEF decision has on cost relief.

• O3.4: Calculating employer SIEF cost savings under the new rate framework can be manual and tedious for the WSIB. Current system limitations may not support program wide analysis of the SIEF’s impact under the new rate framework, making it difficult to understand and communicate the true impact.”

What the VFMA findings indicate is that it is administrative, systemic and “and manual and tedious” work for the WSIB that precludes an assessment of the application of SIEF cost relief in the context of the new rate framework rather than concrete evidence to support a conclusion that the “SIEF is not aligned with the new framework.” Further, there is no objective evidence provided in the VFMA which compares the impact of SIEF within the new rate framework with the pre-new rate framework system. Ultimately, we find that any premium/rate setting framework should ensure that it aligns itself with the Act and does not hold the employer responsible for claims costs that stem from a preexisting condition rather than the work-related impairment.

The VFMA confirms that the WSIB places the onus on employers to initiate SIEF cost relief and one of their recommendations is to “consider returning to the previous SIEF identification process so that it is initiated internally by the WSIB.” It is unclear if the VFMA considered the impact of this years long procedural change before concluding that the “SIEF no longer aligns with the WSIB’s originally stated objectives and may no longer deliver the same level of impact to employers….as it did at the program’s inception or prior to the introduction of the WSIB’s new rate framework.”

The VFMA also notes that smaller employers do not request SIEF very often. The VFMA concludes that “smaller employers achieve no relief when SIEF is applied under the current rate framework” and suggests that it is the SIEF policy which is resulting in unfairness / inequities between smaller and larger employers under the new rate framework. While no concrete evidence or comparative data (pre and post new rate framework) is provided to support this conclusion, we find that it suggests that there is a flaw within the new rate framework itself if “smaller” employers are held accountable for claims costs that stem from a pre-existing condition. We also believe that the 999“unfairness” to smaller employers (as suggested in the VFMA) may stem from the WSIB’s decision to place the onus on employers to initiate SIEF reviews (the impact of which is not assessed in the VFMA).

Ultimately, the VFMA fails to provide empirical, objective evidence and examples to support its finding that “SIEF is not aligned with the new rate framework.” If this is in fact the case, one must ask why the WSIB did not ensure that their “new rate framework” – which came into effect in 2020 and decades after the SIEF policy – is not aligned with the SIEF policy, a policy aimed at providing cost relief to employers for claim costs stemming from a pre-existing condition.

Notwithstanding the above findings – which reflect an inability to assess the impact of the SIEF following the new rate framework introduction – a sweeping conclusion was reached that SIEF is not aligned with it.

RETURN TO WORK AND SIEF

The VFMA and the WSIB fail to explain how SIEF (cost relief to an employer to reflect the impact of preexisting condition on the impairment and period following the accident) is linked with return-to-work goals. The VFMA and the WSIB also fail to provide evidence of such a link or rather, how claims where SIEF cost relief is granted differed materially in some way with respect to return to work as compared to those where SIEF is not granted.

The VFMA confirms that the majority of SIEF requests are initiated by the employer and that “employer initiated SIEF referrals may result in gaps and delays in the decision-making process.” SIEF cost relief is often not granted until after a claim is closed or on appeal (i.e. years after the accident). As such, it is unclear how SIEF cost relief (generally granted long after the accident and after maximum medical recovery is reached) would impact the return-to-work. The VFMA does not address this matter even though the WSIB points to SIEF and return to work as somehow linked. The VFMA has failed to provide objective evidence that the SIEF policy is at odds with return to work.

If the WSIB believes that their return-to-work program is lacking or failing to meet its objective, then perhaps a review of the policies that govern that program and administration of those policies should be undertaken.

VFMA JURISDICTIONAL SCAN REVIEW

Canada is comprised of ten provinces and three territories. Almost all Canadian organizations that administer workers compensation “insurance” have a cost relief mechanism for employers when a preexisting condition adversely impacts the injury/period following the accident. However, the VFMA only considered one Canadian jurisdiction (Manitoba). The remaining “jurisdictional scan” was comprised of six organizations (four of which were in the USA and two in Australia).

It is not clear why the VFMA chose not to “scan” jurisdictions within Canada (other than Manitoba). Thus, the value or relevance of such a scan is questionable in our opinion. In fact, the VFMA acknowledges the “limitations” of their jurisdictional comparison and states that “the organizations that participated in the inter-jurisdictional comparison have various mandates that may vary from the WSIB’s mandate.”

“BETTER, FASTER, EASIER”

The VFMA states the following:

“The WSIB is committed to delivering best in-class programs that meet our vision of better, easier, faster and aligns with our mission to reduce the impact of workplace injury and illness on people and business in Ontario.”

What this commitment appears to overlook is that the WSIB is required to administer the Act which is premised on compensation for work-related impairments. The purpose of the Act is to accomplish such matters as the facilitation of “return to work and recovery of workers who sustain personal injury arising out of and in the course of employment or who suffer from an occupational disease” in a “financially responsible and accountable manner.”

“Better, easier, faster” does not equate to fair, quality programs or being “financially responsible and accountable.” What is “better, easier and faster” for the WSIB is not synonymous with ensuring that an employer’s claim costs stem from and reflect the costs of the work-related impairment alone rather than the effect of a pre-existing condition on the resulting impairment. How the removal of the only cost relief mechanism in place where a pre-existing condition has adversely contributed to the resulting impairment and claim costs that result, is unclear. Furthermore, it fails to support the WSIB’s “mission to reduce the impact of workplace injury and illness” on “business in Ontario.”

We have reviewed and considered the recommendations made by the VFMA and find that the recommendation selected by the WSIB (the wind-down of the SIEF) reflects what is “easier” and “faster” and although not noted, least costly for the WSIB.

In conclusion, we turn to the Workplace Safety & Insurance Act, 1997 (the Act) which in part states the following (emphasis added):

S.1 The purpose of this Act is to accomplish the following in a financially responsible and accountable manner:

1. To promote health and safety in workplaces.
2. To facilitate the return to work and recovery of workers who sustain personal injury arising out of and in the course of employment or who suffer from an occupational disease.
3. To facilitate the re-entry into the labour market of workers and spouses of deceased workers.
4. To provide compensation and other benefits to workers and to the survivors of deceased workers.

S. 2(1) “impairment” means a physical or functional abnormality or loss (including disfigurement) which results from an injury and any psychological damage arising from the abnormality or loss

S. 13 (1) A worker who sustains a personal injury by accident arising out of and in the course of his or her employment is entitled to benefits under the insurance plan.”

Without a workplace injury/impairment, there is no entitlement to benefits under the Act. Entitlement pursuant to the Act stems from a “personal injury by accident arising out of and in the course of” a worker’s employment. This is the threshold for benefits under the insurance plan.

By eliminating the SIEF, the WSIB has effectively concluded that employers will be responsible for claim costs even where those claim costs stem from a pre-existing condition. The WSIB’s decision is not only unfair to employers but also in conflict with the Act, the wording of which (as cited above) is completely overlooked in the VFMA.

We hope that you take the time to consider what we have outlined above rather than simply refer us to the VFMA in response. We also ask if consideration will be given to a new policy that would provide cost relief to employers where a pre-existing condition adversely impacts the accident and/or period following the accident so that employers are not responsible for claim costs that do not stem from the accident and a work-related impairment.

I look forward to your response

Mark Senicar

Partner LSUC Paralegal

SE-GA Workplace Consulting P.C.