Line item: Safety — the cost you must afford.

JanFeb2016WoodIndustryA shop accident can blow up a business launch faster than a visit from a Ministry of Labour inspector.

When embarking on creating a new wood shop, or even just keeping the doors open, ignore health and safety issues at your peril.

Norm Keith, litigation partner at the Toronto-based legal firm Fasken Marteneau, advises that shop owners ask themselves “what are the direct and indirect costs of making you’re sure you’re compliant with the health and safety laws.”

These costs are important to consider due to “the adverse impact costs of not being compliant — which can be devastating,” says Keith, an occupational health and safety defense lawyer and author on the subject, and the first in Canada to earn the Canadian Registered Safety Professional designation in 1998.

For example, says Keith, a small welding shop he’s dealing with “had a workplace fatality and they’re on the verge of bankruptcy because of this case. So it can cost you everything if you don’t manage health and safety right.”

Before you start a business you must really push your level of understanding of the applicable health and safety legislation in your jurisdiction, according to Keith. “It is a matter of dollars and cents, as well as a question of the size the operation, how much you want to invest in safety.”

The start up costs of a business should always include a line item for safety compliance. Keith says, “in other words it should be your intention when starting a business or growing a business to make sure that safety is built into the budget.

“Some specifics in that budget should be the cost of a joint health and safety committee. The committee is required by law in every jurisdiction in Canada. The committee’s going to cost you time and time equals money.

“So they’re going to meet once every three months. Preferably once every month. They’re going to have a two-hour meeting. Depending on the committee size either two or four people whom are workers on an hourly rated basis. Therefore you should actually run some costs on the hourly wage, the average time per year and what it’s going to cost in your lost production time. Hopefully that time is productive in the sense that it reduces hazards and risks to the workplace. It’s still technically a cost.”

Workplace insurance for health and safety is another cost that any new shop has to incur, as well as maintain and scale according to assessable payroll. In B.C. for example, the health and safety regulatory body WorkSafeBC publishes insurance premiums for every aspect of manufacturing, including wooden moulding and wooden furniture manufacture. So if you are running running equipment such as band saws, CNC routers, edge banders, glue machines, planers or sanders, 3.72 percent of your assessable payroll in 2016 should be remitted.

In return for registering with WorkSafeBC, firms are insured against lawsuits from injured workers. Unlike most private insurance plans, there’s no limit to the amount of coverage a business receives, according to the WorkSafeBC website. In the case of a severe injury or death, which could cost a firm several million dollars, liability coverage is a valuable benefit.

By comparison, the 2016 WSIB Ontario premium rates to maintain coverage under the Workplace Safety and Insurance Act for wood-rated shops producing millwork to furniture vary by individual product classification from 4.16 to 5.57 percent. In the province of British Columbia, for example, you are legally required to register for insurance coverage with WorkSafeBC. For example: If you are a general contractor who employs workers or hires labour contractors who don’t carry their own workplace insurance coverage, you are required to register; if you are a general contractor who subcontracts all work to independent firms or to labour contractors who have their own workplace insurance coverage, registration may still be mandatory; if your subcontractor is registered but not making payments to WorkSafeBC as required, you could be liable for insurance premiums owing in connection with the work or service being performed on your behalf; and, if you’re not registered, and your subcontractor’s account isn’t up to date, or if the subcontractor misrepresents its registration (i.e. if WorkSafeBC considers the subcontractor to be a worker), you could also be liable for the costs of a claim should someone be injured on the job.

For a small contractor, all of these expenses can be onerous. Vancouver-based TLC Design Inc. custom furniture shop owner Joe Edwards, having an extra payroll period in the month can “make it tough to get ahead. You try to get used to it but never seem to catch up.” He’s not sure where he’d come up with the money for high ticket items “that cost thousands and thousands of dollars” such as fire suppression systems and air exchange units that may be mandatory someday.

Insurance may be a must-have business expense, but having a compliance program in place is important as well, according to Keith. “You have to have a policy and a program implemented in every province and every jurisdiction in Canada. And somebody has got to prepare that. Whether it’s an external consultant that requires you to write a cheque or a staff member that costs time and time is money because you’re paying them on the basis of time.”

In the province of Ontario, the Pre-Start Health and Safety Review (PSR) has been in place since 2000. PSRs are intended to identify potential hazards to workers in a factory and recommend remedial measures to control or remove these potential hazards before an apparatus, structure, protective element or process (or modification to an apparatus, structure, protective element or process) is operated or used in that factory.

A PSR cannot be conducted by the employer and requires an outside professional engineer to assess equipment, make change orders or provide approval for the device to be used. Michael Wilson, a consultant with Workplace Safety & Prevention Services in Mississauga, Ont., says “If I were to install or upgrade a particular machine with certain characteristics, would have to undertake the PSR.

“For example, let’s say I have an edge banding machine. When I feed a piece of wood into this machine, it goes through a small opening, various automatic machinery applies the banding and glue. Let’s also say there is a door that automatically shuts the machine down when it is opened. The switch that signals the machine to shut down is considered a safeguarding device. Those particular devices could be a door switch, light curtain or area scanner.

“If I was going to install this particular type of machinery in my facility, the industrial regulations require that a pre-start review is conducted. In which case it will require you to go out and look for an engineer that will provide that service.”

What if a resourceful wood shop start-up decided to purchase equipment from Ebay, an auction or other discount supplier? Since technical certication standards are created at the national level, the answer could apply to anyone in Canada, not just Ontario, Wilson noted.

“So when the (PSR) engineer comes in to look at this machinery they are going to consider the manufacturer, the integrator, how the switch is wired and shuts down the machine, then how reliable that safety system is to ensure it’s up to scratch with respect to health and safety standards.

“There are any number of standards out there from the CSA — Canadian Standards Association, ISO out of Europe or ANSI out of the U.S. So your engineer is not only looking for compliance to the regulations which are the legal requirements but also looking to those standards for good engineering practises with respect to integrating those safety devices.”

Purchasing non-certified equipment could void insurance coverage, according to PSR expert and professional engineer Louie D’Orazio, president of Elite Engineering Group Inc. in Ingersoll, Ont. “PSR paperwork for every piece of equipment — electrical, lockout, hand protection, dust extraction — helps keep the Ministry of Labour away.”

According to Wilson, “once the engineer has supplied the (PSR) report he actually has finished his or her responsibility. The onus is now on the employer to take action on those recommendations to make sure that the equipment is up to scratch before the equipment can go into use. “Nobody wants to caught shorthanded when the Ministry comes for an onsite inspection.”

Wilson maintains that “you have to ask yourself ‘is an ounce of prevention worth a pound of cure?’ I would say absolutely 100 percent. So it has to be part of the business plan. What would a responsible person do, what should I have in place?”

Naturally an employer wants to feel assured that his people will get to go home in the exact same condition that they arrived at work. “I think when you look at a lost time injury,” Wilson says, “it can be significant, so if you have a bad accident history your insurance premiums can go up. Be prudent, contact WSPS or whoever is available to you in your province and say ‘look, how do I make sure I have the bases covered, I want a safe business, a successful business.’”


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