< Previous15. PREMIUM REVENUEAccounting policy In accordance with Section 73(2) of the Act, the operations of the WCB are categorized into several classes of employers.General Employers Pool Employers 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 prevention rebates, uncollectable account write-offs, interest and penalties on overdue amounts and adjustments of premiums for prior periods. The Prevention Rebate Program (PRP) reduces the risk of workplace injury and illness by rewarding employers who have developed and maintained meaningful workplace safety and health management systems. SAFE Work Manitoba administers the PRP, determines employer eligibility and issues the prevention rebate. SAFE Work Certified employers who have met all criteria are eligible for the prevention rebate. The rebate is calculated using the actual payroll associated with the rebate eligibility period. Other Classes of Employers Employers in Class A through Class D – principally government bodies and employers named by Regulation 278/91 – are subject to individual responsibility for costs attributable to claims arising from their employees, as well as a proportionate share of administration expenses. As such, premium revenue from Class A through Class D employers is recognized as these costs are incurred. Current costs are collected as billed while future costs are recorded as deferred assessments (Note 7). 20212020Premiums — Class E employers$ 189,768 $177,419Prevention rebates (6,810) (5,984) 182,958 171,435Assessments — Class A through Class D employers 35,306 32,772 Increase in deferred assessments (Note 7) 2,915 13,192 Total premium revenue$ 221,179$217,399* Premiums - Class E employers includes a reduction of $6.4 million in 2020 due to the impact of COVID-19.80 2021 WCB ANNUAL REPORT16. OPERATING EXPENSES20212020Salaries, employee benefits and training$ 74,268 $ 70,972 Information technology service fees 2,698 2,681 Occupancy costs 3,096 3,074 Lease depreciation 821 821 Lease interest 179 203 Office supplies, services and projects (137) 910 Communications 3,041 2,819 Professional fees 2,350 2,249 Donations 125 126 Amortization of capital assets 5,259 5,792 91,700 89,647 Appeal Commission 1,335 1,342 Research and Workplace Innovation Program grants 370 (64)Recoveries from the Government of Canada (1,867) (1,788)SAFE Work Manitoba 7,529 6,797 Province of Manitoba Workplace Safetyand Health Department funding (Note 17) 7,995 8,101 Total operating expenses$ 107,062$ 104,035 Of the total operating expenses, $11.4 million ($11.4 million in 2020) was allocated to Class A through Class D employers based on the current year’s transaction volumes.The WCB administers the Government Employees Compensation Act program for the Government of Canada. The Government of Canada reimburses the WCB for all claims paid out on their behalf plus a recovery of operating expenses.2021 WCB ANNUAL REPORT 8117. RELATED PARTY TRANSACTIONSThe WCB is a statutory corporation created by the Manitoba Legislature. As a corporation 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 2021, the amount charged to operations under this provision was $7.4 million ($7.5 million in 2020).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 2021, the amount charged to operations under this provision was $0.6 million ($0.6 million in 2020).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 a Class C employer under The Workers Compensation Act of Manitoba. Accordingly, the Province of Manitoba was allocated $4.8 million ($4.8 million in 2020) 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.No guaranteed debentures issued by the Province of Manitoba were included in the WCB’s investment portfolio as at December 31, 2021 ($4.5 million in 2020).Other Related Party Disclosures In addition to the related government entities above, the key management personnel of the WCB (comprised of the WCB executive personnel and the Board of Directors) are deemed related parties. By definition, close family members of the key management personnel are also related parties of the WCB. Any transactions or business relationships are incidental, and carried out at normal trade terms.The WCB has a pension plan for the benefit of WCB employees, which is a related party by definition of IAS 24 Related Party Disclosure. Detailed information on transactions with the pension plan are included in Note 12.Key Management Compensation The following table shows total compensation for the executive personnel of the WCB:20212020Short-term employee benefits$ 1,661 $ 2,019 Post-employment benefits 532 456 Total key management compensation$ 2,193 $ 2,475 82 2021 WCB ANNUAL REPORTShort-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 2021, total compensation paid to the Board of Directors was $0.1 million ($0.1 million in 2020).18. 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.19. FUNDING POLICY AND CAPITAL MANAGEMENT The Act establishes the Accident Fund to provide for the payment of compensation, outlays and expenses of the workers compensation system. The Act also requires that sufficient funds be available for the payment of all current and future liabilities, and the maintenance of reserves sufficient to ensure the financial security of the system in the long term. The funding policy is the framework for the management of the Accident Fund to maintain the workers compensation system’s financial security while ensuring sufficient funds are available to meet future benefit payments and maintain rate stability. The WCB is committed to operating on a fully funded basis and is considered 100 per cent funded when assets equal liabilities. The ratio of assets to liabilities is the funding ratio. The funding ratio target for the Accident Fund is 130 per cent. The 130 per cent target provides for 100 per cent funding – sufficient to fully fund all current and future liabilities – plus an additional 30 per cent to protect the system from risks, uncertainties and market volatility. The WCB’s funding ratio is reviewed after the annual financial statements are approved by the Board of Directors. When the funding ratio deviates from the 130 per cent target, the funding policy directs the WCB to return reserves to the funding ratio target. When the funding ratio exceeds the 130 per cent target surplus distributions may be paid. When the funding ratio falls below the 130 per cent target the WCB may approve adjustments in assessment rates in such a manner that will bring the funding ratio back to the 130 per cent target.The WCB’s funding ratio at December 31 is as follows: 20212020Total assets$ 2,118,749 $ 2,097,782 Total liabilities 1,408,893 1,459,980 Funding ratio (assets/liabilites)150.4%143.7%On April 19, 2021, in accordance with the funding policy, the Board of Directors approved a surplus distribution of 40 per cent of the prior year’s premium. To December 31, surplus distribution of $71.4 million ($36.3 million in 2020) was paid to eligible employers.2021 WCB ANNUAL REPORT 83Five Year PlanWorking from the strategic framework approved by our Board of Directors in 2018, the WCB has developed its Five Year Plan focused on four priorities to guide our work and initiatives. These priorities were chosen to reflect our organization’s vision to attract, retain and develop the staff needed to deliver excellent service to our customers and build a safer Manitoba that fosters prevention and return to work.For a second year, the COVID-19 pandemic has delayed the implementation of some of the strategic initiatives outlined in this plan. The WCB will require an extended timeline to fulfill these initiatives.Introduction86 2021 WCB ANNUAL REPORTOur Strategic PrioritiesCreate a SAFE Work CultureEnable Successful Return to WorkDeliver Excellent ServiceGrow our People2021 WCB ANNUAL REPORT 87Strategic Goal: Reduce the number and severity of injuries.Strategic Initiatives:Champion a vibrant safety culture in which all Manitobans share values and beliefs that support workplace injury and illness preventionThe WCB, through its prevention division, SAFE Work Manitoba, will work to increase public awareness for workplace safety and health and for injury prevention through targeted campaigns to reach stakeholders and shift perspectives about safety and health at work. Our organization will work with partners to identify and support executives who are safety leaders. Programming will also focus on finding ways to engage with educational institutions in Manitoba to increase workplace safety and health awareness and training.Expand access to safety programs to build an inclusive, coordinated prevention system with all partnersSAFE Work Manitoba will continue to build strong partnerships with industry-based safety programs (IBSPs) with the goal of expanding and enhancing safety programs to ensure all Manitoba employers and workers have access to sector-specific services. Through this partnership, SAFE Work Manitoba will work to increase the number of stakeholders who have received workplace safety and health education and training through IBSPs and other safety partners.Create a SAFE Work CultureEnhance safety program standards to establish best practices and promote consistencySAFE Work Manitoba will continue to support and provide oversight for SAFE Work Certified, Manitoba’s safety and health certification standard that helps make workplaces safer and provides a financial reward to employers that take proactive steps to prevent workplace injuries and illnesses. This includes working with IBSPs and other partners to increase employer participation in safety certification that meets the SAFE Work Certified standard.SAFE Work Manitoba will work with prevention system partners to improve the consistency and calibre of safety and health training with a new training standards program. This initiative will work to increase the quality and consistency of safety and health training delivered and ensure workers have the right skills and knowledge needed to do their work safely and reduce their risk of injury.88 2021 WCB ANNUAL REPORTFive Year TargetsIn the five-year period covered by this plan, the WCB is focused on the following milestones:Time Loss InjuriesWCB-Covered Payrollper 100 full time workers12,000 or less2.2 or lessReduce the number to: Achieve a rate of:per 100 full time workersSevere InjuriesDays Lost to Workplace Injury or IllnessReduce the number to:Achieve a rate of:748,000 or less1.38 or less2,200 or less0.4 or lessReduce the number to: Achieve a rate of:per 100 full time workers42%that is SAFE Work Certified72%or moreIncrease percentage served by an industry-based safety program to Achieve at least: 2021 WCB ANNUAL REPORT 89Next >