Optimizing Health and Safety Proactive Inspections in Canada

TitreOptimizing Health and Safety Proactive Inspections in Canada
Publication TypeWorking Paper
AuthorsBouchard St-Amant, P-A.

Each year, the Government of Canada sends inspectors to firms to ensure compliance to the occupational health and safety provisions of the Canada Labour Code. In this paper, I present supporting evidence that inspections reduce the number of disabling injuries. By combining two administrative databases covering work sites under federal jurisdiction, I estimate the impact of inspections on injuries by using the exogenous part of the government's assignment rule of inspectors. The marginal impact of an inspection on injuries is estimated to be -0.33 in the year following the inspection compared to the year of inspection. Furthermore, by introducing a measure of diminishing marginal returns of inspections by sector, I suggest a more efficient assignment rule for inspections to help further minimize the number of injuries resulting from non-compliance with the Labour Code. This improved rule includes a reallocation of inspections across industries compared to the current allocation. In particular, inspections are transferred from the sectors of Air Transport and Road Transport to the sectors of Banking, Postal Contractors and Crown Corporations. A counterfactual experiment with the new allocation of inspections suggests a decrease in the number of injuries by 18% for the same yearly average number of inspections. Based on available estimates of the cost of injuries, the suggested change in the targeting tool would lead to annual savings of 72 million dollars in workers compensation claims.