< Previous KEY ACCOMPLISHMENTS IN 2017• On January 1, 2017, Manitoba employers began qualifying for a prevention rebate in connection with meeting the standard of SAFE Work Certified – SAFE Work Manitoba’s safety certification program. SAFE Work Certified is built around the safety essentials of leadership commitment, hazard identification and risk control, and worker participation. By meeting this standard, eligible employers experience many benefits, including a 15 per cent rebate on their WCB premium, or a maximum of $3,000 for smaller employers. • In February, SAFE Work Manitoba launched its Musculoskeletal Injury (MSI) Strategy to address the nearly 6,000 MSIs that occur in Manitoba workplaces every year. The strategy is focused on working with four groups that have the most influence on preventing MSIs: employers; educators; safety professionals (including industry-based safety programs/associations) and workers themselves.• SAFE Work Manitoba put the focus on psychological health and safety in the workplace with the release of a new strategy in May. This long-term plan outlines work in three key areas – raising awareness of workplace psychological health and safety; developing practical tools and resources for workplaces; and building the capacity of partners to provide services.• Everyone has a role to play when it comes to safety at work. A SAFE Work Manitoba campaign SAFE WORK MANITOBA | 30drove home this message, linking it to hockey and the idea that teams work best when everyone is involved – from the top floor to the shop floor. • The second year of the Worked Up campaign encouraged parents to talk to their kids about workplace safety. This successful campaign, which had well-known Manitobans sharing their experiences with safety as young workers, garnered much media and public attention. • Helping to build a strong culture of workplace safety was a major focus for SAFE Work Manitoba in 2017. In a strong safety culture, people believe workplace injuries and illnesses can be prevented, leaders drive improvement, and everyone plays a part in building safe and healthy workplaces. A safety culture campaign helped employers assess and start to improve the culture of safety in their workplaces. • SAFE Work Manitoba was proud to support a brand-new gala event called The Safetys, which celebrates Manitobans who are making our workplaces safer and healthier. SAFE Work Awards were presented at The Safetys, along with awards from seven other Manitoba safety organizations. The Safetys will be back in the fall of 2018.• Another successful SAFE Work Manitoba Committee Leadership Conference was held September 27. The fourth annual conference attracted more than 300 workplace safety and SAFE WORK MANITOBA | 31INCREASING THE PERCENTAGE OF WCB-COVERED PAYROLL THAT IS SAFE WORK CERTIFIED2017 - 9%DAYS LOST TO WORKPLACE INJURY OR ILLNESS RATEper full time worker2013 1.902014 1.782015 1.682016 1.672017 1.65** Estimated, to be confirmed mid-2018 KEY ACCOMPLISHMENTS IN 2017health co-chairs from across Manitoba for a day of learning and sharing best practices and ideas – all with the goal of advancing injury and illness prevention in the workplace.• SAFE Work Manitoba released its five-year Occupational Disease and Illness Prevention Strategy in October. It addresses some of the most severe health conditions that Manitoba workers experience; these include cancer, lung disease and other illnesses caused by exposure to harmful substances in the workplace. The strategy deals with one challenge in particular – a lack of comprehensive data to show how often workers are exposed to these materials.• The final campaign of the year had the message Safe Work: The Tool for Every Job. Using humour to make this point, the November campaign was well-received, and led to much discussion in workplaces and on social media.• A total of 3,031 Manitobans took in SAFE Work Manitoba workshops in 2017. Among these were two new workshops – Building Office Ergonomic Champions and Preventing Musculoskeletal Injuries.SAFE WORK MANITOBA | 323,031PARTICIPANTS IN SAFE WORK MANITOBA WORKSHOPSSAFE WORK MANITOBA | 33SAFE WORK MANITOBA OPERATING EXPENSESYear ended December 31 (in thousands of dollars)20172016Salaries, employee benefits and training$3,438$3,438Office supplies, services and projects181128Communications2,3722,380Professional fees71111SAFE Work Manitoba Total Operating Expenses$6,062$6,057FINANCIAL REPORT36 | WCB 2017 ANNUAL REPORTMANAGEMENT’S RESPONSIBILITY FOR FINANCIAL INFORMATIONThe consolidated financial statements of the WCB were prepared by management, who are responsible for the integrity and fairness of the data presented, including significant accounting judgments and estimates. This responsibility includes selecting appropriate accounting principles consistent with International Financial Reporting Standards. Financial information contained elsewhere in this annual report conforms to these financial statements.Management believes the system of internal controls, review procedures and established policies provide reasonable assurance that relevant and reliable financial information is produced and that assets are properly safeguarded. Management also believes that the WCB’s operations are conducted in conformity with the law and with a high standard of business conduct. The internal auditor performs periodic audits designed to test the adequacy and consistency of the WCB’s internal controls.The Board of Directors is responsible for overseeing management in the performance of its financial reporting responsibilities and approved the financial statements and other financial information included in this annual report on April 19, 2018.The Audit Committee assists the Board of Directors in its responsibilities. This Committee reviews and recommends approval of the consolidated financial statements and annual report. Internal and external auditors and actuaries have unlimited access to the Audit Committee. The Committee reviews the financial statements and other content of the annual report with management and the external auditors, and reports to the Board of Directors prior to their approval for publication. The Chief Actuary of the WCB completed an actuarial valuation of the benefit liabilities included in the financial statements of the WCB and reported thereon in accordance with accepted actuarial practices. The firm of Eckler Ltd. has been appointed as a peer reviewer to the WCB. The Chief Actuary’s opinion on the valuation of the benefit liabilities is provided on page 42. Eckler Ltd.’s actuarial review is provided on page 43.Grant Thornton LLP, independent auditors appointed as a sub-agent to the Provincial Auditor General, has performed an independent audit of the consolidated financial statements of the WCB in accordance with Canadian generally accepted auditing standards. Their Auditor’s Report, on page 44, outlines the scope of this independent audit and includes their opinion expressed on the 2017 consolidated financial statements.Winston Maharaj President and CEOLorena B. Trann, FCPA, FCMA Chief Financial OfficerApril 19, 2018WCB 2017 ANNUAL REPORT | 372017 MANAGEMENT DISCUSSION AND ANALYSISAs an integral part of the annual report, the management discussion and analysis provides further insights into the operations and financial position of the WCB and should be read in conjunction with the consolidated financial statements and supporting notes.2017 ResultsIn 2017, positive results for investment returns and claim costs incurred produced an operating surplus of $82 million (budget, $7 million). After recording unbudgeted losses on the WCB retirement plan, total comprehensive income was $57 million. Investment returns were 8.3 per cent, resulting in $130 million of income ($38 million over budget). Premium revenues of $244 million were essentially on budget.The 2017 cost of claims of $191 million was $31 million under budget due to positive outcomes arising from the benefit liability valuation and no costs arising in 2017 from the Legislative Review.Other comprehensive loss of $25 million was experienced, an outcome of recording a loss on the WCB retirement plan.The WCB’s accident fund reserve increased from $663 million to $745 million, exceeding the accident fund reserve target level (calculated at $492 million for 2017). The WCB is fully funded with a funding ratio of 148.8 per cent versus target of 130.0 per cent. RevenueThe WCB’s revenue is derived from two sources: premium revenue and investment income.Premium Revenue Premium revenue is the largest revenue stream for the WCB. Premium revenue was $244 million in 2017 ($257 million in 2016), versus the budget of $241 million. The final average assessment rate per $100 of assessable payroll was $1.10 (budget, $1.10). Premiums are derived from Class E and self-insured employers:• 2017 Class E employers’ premiums were $208 million, down eight per cent from 2016 as a result of a 12 per cent drop in the average assessment rate (2017, $1.10 vs. 2016, $1.25).• 2017 self-insured employers’ premiums, which are calculated based on claim costs incurred, were $35 million ($30 million in 2016), increasing as a result of changed claims experience in 2017. The chart below shows the components of the 2017 premium revenue.Premium Revenues20172016035.2208.4226.630.2Class E EmployersSelf-insured Employers38 | WCB 2017 ANNUAL REPORTInvestment Income In 2017, the WCB experienced investment income of $130 million from its investment portfolio ($49 million in 2016). Investment income was budgeted at $92 million for 2017. The investment portfolio is comprised of a variety of asset classes as set by policy. At December 31, 2017, the portfolio had a market value of $1.7 billion ($1.6 billion at the end of 2016) and an asset mix of 41 per cent fixed income, 44 per cent equities and 15 per cent real assets (38 per cent fixed income, 45 per cent equities and 17 per cent real assets in 2016).The WCB has engaged a number of professional investment managers. Each of these managers has a mandate as well as a benchmark rate of return to achieve. The gross returns before expenses by manager mandate and a comparison of this result to the benchmark returns are displayed in the following chart.7.8%9.1%16.8%13.6%20.3%18.6%22.7%28.4%2.7%2.5%9.1%6.1%4.4%7.1%8.3%7.6%CanadianEquitiesU.S.EquitiesEurope, Australasia,& Far East EquitiesEmergingMarkets EquitiesFixedIncomeInfrastructureRealEstateTotal2017 Returns by Manager Mandate% Return (Gross)Benchmark IndexThe investment portfolio’s gross rate of return was 8.3 per cent in 2017 (benchmark 7.6 per cent) and 3.5 per cent in 2016 (benchmark 6.4 per cent). The 2017 investment portfolio returns reflected strong equity markets and positive results across all other asset classes. In 2017 equity markets provided strong returns on the backdrop of a stable global economy and growth in corporate earnings. International equity was the best performing as economies in those regions exceeded muted expectations. US equity was supported by an accelerating economy, anticipated benefits from tax policy changes, and strong performance from the technology sector. Canadian equity benefited from an improvement in energy prices. WCB 2017 ANNUAL REPORT | 39The 2017 fixed income returns were limited to income, with rising interest rates causing negative capital returns. Over the course of 2017, the US Federal Reserve (the Fed) raised rates three times, and the Canadian Central Bank twice, at increments of 0.25 per cent. Rate increases were partially reflected in fixed income prices in the fourth quarter of 2016, resulting in a limited capital impact in 2017.The outlook is for continued modest global economic growth and gradual increases in interest rates. Continued economic growth supports equity markets, however there is caution on high valuations (prices) after an extended period of gains, and increased volatility as a result of the transition to a normalized rate environment. In the absence of a recessionary economy, potential declines in the equity markets are expected to be shorter term price corrections, and not an extended downturn. The speed and magnitude of interest rate increases will be influenced by the Fed. Their expressed policy is for a gradual increase from the current historically low levels to reflect the extended economic stability post the 2008 financial crisis. Rising rates are expected to result in limited return from Fixed Income.Claim Costs IncurredClaim costs incurred are an estimate of the full costs for compensable injuries that occurred in 2017, together with adjustments to prior years’ estimates. The estimates take into account claims that are in pay, reported but as yet unpaid claims, and unreported claims.Claim costs incurred increased $23 million (14 per cent) to $191 million in 2017 with the increased costs arising due to actuarial adjustments. Short Term DisabilityLong Term DisabilitySurvivor BenefitsHealthcare BenefitsRehabilitation ServicesTotal(in millions of dollars)2017$57.9$57.4$7.5$64.6$3.7$191.1201669.225.56.668.8(2.0)168.1(Decrease) increase$(11.3)$31.9$0.9$(4.2)$5.7$23.0Benefit LiabilitiesThe benefit liabilities increased $8 million (1 per cent) in 2017. Muted inflation accounted for the small percentage increase. Short Term DisabilityLong Term DisabilitySurvivor BenefitsHealthcare BenefitsRehabilitation ServicesTotal(in millions of dollars)2017$158.8$506.7$123.3$318.6$7.0$1,114.42016159.6504.5127.6311.33.61,106.6(Decrease) increase$(0.8)$2.2$(4.3)$7.3$3.4$7.8Next >