< Previous70 | WCB 2017 ANNUAL REPORTManitoba lists specific illnesses and injuries presumed to be caused by firefighting, unless the contrary is proven. Also included in the benefit liability is $91.9 million ($92.1 million in 2016) for the future cost of administering existing claims.Sensitivity of Actuarial AssumptionsThe most significant assumption in the determination of the benefit liabilities is the discount rate. The following table shows the sensitivity of the benefit liabilities to an immediate one per cent increase or decrease in the key assumptions used to determine the liabilities:Change in liability in millions:20172016+/- % change on assumed rates+1.0%-1.0%+1.0%-1.0%Discount rate$ (88)$104$(87)$103Wage inflation rate54 (47)53(46)General inflation rate9 (8)11(9)Healthcare inflation rate37(31)36(30)An increase in the discount rate results in a decrease to the benefit liabilities and vice versa.An increase to any of the inflation rates results in an increase to the benefit liabilities. Each inflation rate affects only those benefits that are directly impacted by that type of inflation. For example, healthcare inflation only affects healthcare liabilities.Claims riskBecause there is no statutory limit on the benefit amount payable or the duration of the risk exposure related to work-related injuries or illnesses, the WCB bears risk with respect to its future claims costs, which could have material implications for liability estimation. In determining the Board’s claim benefit liabilities, a primary risk is that the actual benefits payments may exceed the estimation of the amount of the liabilities. This may occur due to changes in claim reporting patterns, frequency and/or size of claim payments or duration of claims. Compensable injuries and benefits payable may also change due to legislation or policy changes. With potentially long claim run-off periods, inflation is also a factor because future costs could escalate at a faster rate than expected. Liability Adequacy TestIFRS 4 Insurance Contracts requires an insurer to apply a liability adequacy test that meets specified minimum requirements, as follows:a. the test considers current estimates of all contractual cash flows, and of related cash flows such as claims handling costs, as well as cash flows resulting from embedded options and guarantees; andb. if the test shows that the liability is inadequate, the entire deficiency is recognised in profit or loss.If these minimum requirements are met, there are no further requirements.The current claim benefit liability valuation meets the liability adequacy testing requirements of IFRS 4. Accordingly, a separate annual liability adequacy test is not required. WCB 2017 ANNUAL REPORT | 71Claims DevelopmentThe table below compares actual claims liabilities to previous estimates back to the earliest period for which there is material uncertainty about the estimate and timing of claim payments.Injury YearEstimate of cumulative claims2008 & Prior200920102011201220132014201520162017TotalEnd of accident year$ 1,927,217184,494181,728196,690202,359211,487219,081195,543192,331199,3111 year later1,917,852165,260171,672182,934204,976203,221187,526188,020189,192- 2 years later1,954,496172,820170,445193,678200,459180,672180,810184,957-- 3 years later2,047,531173,058183,276190,184184,729177,911 178,809--- 4 years later2,067,280184,782181,488175,290 183,041176,628---- 5 years later2,184,022183,809169,155171,743181,176----- 6 years later2,244,803173,308166,838169,418------ 7 years later2,132,778171,647166,251------- 8 years later2,117,255170,606-------- 9 years later2,118,340--------- Estimate of cumulative claims$ 2,118,340 170,606 166,251169,418181,176176,628178,809184,957189,192199,311$3,734,688Cumulative claim payments(1,235,653) (113,924)(106,369) (103,062)(105,639)(94,789)(88,000) (84,475)(78,253)(49,587)(2,059,751)Currrent year unpaid and unreported claims 882,68756,68259,88266,35675,53781,83990,809100,482110,939149,7241,674,937Effect of discounting (759,530)Administration cost within benefit liabilities 91,904Future dated long latency liability 107,053Total benefit liabilities$ 1,114,36472 | WCB 2017 ANNUAL REPORT14. BENEFIT LIABILITIES FOR SELF-INSURED EMPLOYERSNote 13 contains a complete description of the components of the benefit liabilities for all employers. An analysis of the portion relating to self-insured employers is as follows:20172016Short Term DisabilityLong Term DisabilitySurvivor BenefitsHealthcare BenefitsRehabilitation ServicesTotalTotalBalance at beginning of year$18,632 $71,188 $21,661 $54,021 $110 $165,612 $168,183 Add: Claim costs incurredCurrent year8,0324,4086257,0831920,16718,217Prior years1,3283,095(89)3,425(6)7,7534,3699,3607,50353610,5081327,92022,586Less: Claim payments madeCurrent year4,8793401272,740-8,0866,905Prior years4,6954,1432,2826,219(41)17,29818,2529,5744,4832,4098,959(41)25,38425,157Balance at end of year$18,418 $74,208 $19,788 $55,570 $164 $168,148 $165,612 Included in premiums and claim costs for self-insured employers are payments in the amount of $5.2 million ($4.6 million in 2016) made by self-insured employers directly to injured workers on the WCB’s behalf. These amounts are reported to the WCB for inclusion in these financial statements.Included in the benefit liabilities balance is $46.0 million ($42.6 million in 2016) for self-insured employers’ share of the long latent occupational disease liability and $13.4 million ($13.2 million in 2016) for the future cost of administering existing claims.WCB 2017 ANNUAL REPORT | 7315. PREMIUM REVENUEAccounting policyThe operations of the WCB are categorized, in accordance with the Act, into Class E and several classes of self-insured employers.General Employers PoolEmployers registered within Class E are subject to collective liability, and premium revenue is estimated by applying applicable industry assessment rates to the employers’ reported assessable payrolls for the current year. Any difference between the estimated premium revenue and the actual premium revenue is credited or charged to income in the year the determination is made.Premium revenue is fully earned and recognized over the period that coverage is provided. Premium revenue reported in the period is recorded net of uncollectable account write-offs, interest and penalties on overdue amounts and adjustments of premiums for prior periods. Self-Insured Employers Self-insured employers – principally government bodies and railways and their subsidiaries – are subject to individual responsibility for costs attributable to claims arising from their employees, as well as administration expenses incurred on behalf of self-insured employers. As such, premium revenue from self-insured employers is recognized as these costs are incurred. Current costs are collected as billed while future costs are recorded as deferred assessments. The Government of Canada and its agencies are self-insured based on the Government Employees Compensation Act. Under this Act, the administration of this program is delegated to the WCB which acts as agent of the Government of Canada for the payment of compensation to federal employees in this province.20172016Premiums — Class E employers$208,395$226,639Assessments — Self-insured employers32,10529,268Increase in deferred assessments (Note 7)3,097974Total premium revenue$243,597$256,88174 | WCB 2017 ANNUAL REPORT16. OPERATING EXPENSES20172016Salaries, employee benefits and training$66,406$65,003Information technology service fees 4,9021,703Occupancy costs3,6763,411Office supplies, services and projects7561,966Communications1,7271,528Professional fees2,4503,099Donations134116Amortization of capital assets4,9073,34584,95880,171Appeal Commission1,3721,400Research and Workplace Innovation Program grants8441,320Recoveries from the Government of Canada(2,348)(2,193)SAFE Work Manitoba6,0626,057Province of Manitoba Workplace Safetyand Health Department funding (Note 17)9,3718,961Total operating expenses$100,259$95,716Of the total operating expenses, $9.5 million ($8.5 million in 2016) was allocated to self-insured employers based on the current year’s transaction volumes.The WCB administers the Government Employees Compensation Act program for the Government of Canada. The operation of this program is reflected only to the extent of the recoveries of operating expenses.17. RELATED PARTY TRANSACTIONSThe WCB is a statutory corporation created by the Manitoba Legislature. The WCB is a government agency of the Province of Manitoba that operates at arm’s-length from government. As an agency of the Province of Manitoba, the WCB applies the exemption for government-related entities in IAS 24 Related Party Disclosures. Pursuant to The Workplace Safety and Health Act of Manitoba, the Province may pay the expenses incurred in the administration of that Act out of the consolidated fund and may, subsequently, recover such portion as it may determine from the WCB under The Workers Compensation Act of Manitoba. For 2017, the amount charged to operations under this provision was $8.7 million ($8.3 million in 2016).Also, under Section 84.(1) of The Workers Compensation Act of Manitoba, the Province may pay the costs incurred in respect of worker advisors and may recover them from the WCB. For 2017, the amount charged to operations under this provision was $0.7 million ($0.6 million in 2016).In addition to the legislated obligations referred to above, included in these financial statements are amounts resulting from routine operating transactions conducted at prevailing market prices with various provincial government controlled ministries, agencies and Crown corporations with which the WCB may be considered related. This includes the provision of assistance, in the form of medical opinions and appeal services, for the Province of Manitoba relating to criminal injury claims. The provincial government is also a self-insured employer under The Workers Compensation Act of Manitoba. Accordingly, the Province of Manitoba was allocated WCB 2017 ANNUAL REPORT | 75$3.8 million ($3.1 million in 2016) of the total operating expenses (Note 16) based on their transaction volume. Balances resulting from transactions with the Province of Manitoba are included in these financial statements and are settled on normal trade terms.Included in the WCB’s investment portfolio as at December 31, 2017 are guaranteed debentures issued by the Province of Manitoba in the amount of $2.8 million ($2.8 million in 2016).Other Related Party DisclosuresIn addition to the related government entities above, the key management personnel of the WCB (comprised of the WCB executive personnel and the Board of Directors) are deemed related parties. By definition, close family members of the key management personnel are also related parties of the WCB. Any transactions or business relationships are incidental, and carried out at normal trade terms.The WCB has a pension plan for the benefit of WCB employees, which is a related party by definition of IAS 24 Related Party Disclosure. Detailed information on transactions with the pension plan are included in Note 12.Key Management Compensation The following table shows total compensation for the executive personnel of the WCB:20172016Short term employee benefits$1,768$1,859Post-employment benefits515331Total key management compensation$2,283$2,190Short term employee benefits include salary, vacation, car allowances, group health and dental benefits, group life insurance, and the employer’s share of contributions to the Canada Pension Plan and employment insurance. Post-employment benefits include the estimated current service cost accrued for pension and other post-employment benefits. The Board of Directors of the WCB is comprised of 10 members appointed by the Government of Manitoba. Members’ remuneration is set out in Order in Council passed by Lieutenant Governor in Council. For 2017, total compensation paid to the Board of Directors was $0.1 million ($0.2 million in 2016).18. COMMITMENTSThe WCB has signed operating leases for office premises and office equipment expiring at various times until October 30, 2026. The minimum lease obligations over the next five years are:20182019202020212022ThereafterTotal$2,008$1,683$1,347$1,376$1,364$3,390$11,16876 | WCB 2017 ANNUAL REPORT19. CONTINGENCIES The WCB is party to various claims and lawsuits related to the normal course of business that are currently being contested. In the opinion of management, the outcome of such claims and lawsuits are not determinable. However, based on the total amount of all such actions, the WCB has concluded that their outcomes, either individually or in aggregate, will not have a material effect on the results of operations or financial position.20. COMPARATIVE FIGURES Certain comparative figures and disclosures have been reclassified to conform to the financial statement presentation adopted in the current year.WCB 2017 ANNUAL REPORT | 772018 – 2022 FIVE YEAR PLANThe financial statements presented in the Five Year Plan are unaudited.Next >