Injury boards tally $6.8B surplus

CALGARY• Workers’ compensation boards in seven provinces and one territory are overfunded by a total of $ 6.8 billion, according to a new study from the Canadian Federation of Independent Business.

In a report released Wednesday, the CFIB used workers’ compensation boards’ funding ratios from the year ended 2016 to determine which of Canada’s 12 provincial and territorial (Northwest Territories and Nunavut share a workers’ compensation board) were overfunded, and by how much.

The report calls on provinces that have overfunded boards to provide rebates to employers, but notes that only about half of the boards in the country have rebate policies in place. Those that do have a higher threshold for repaying workers’ compensation contributions than the CFIB considered “ideal.”

“Typically, when you overpay your taxes, you get a refund. It’s time boards give that refund,” CFIB executive vice-president and chief strategic officer Laura Jones said in a release. “The bottom line is that overcharging employers is unfair, unproductive and unnecessary.”

Only Nova Scotia’s and Ontario’ s boards were underfunded, while Quebec’s and the shared Northwest Territories/ Nunavut board were adequately funded.

The C FIB identifies boards with total assets representing 100 per cent and 110 per cent of its total liabilities as being in its ideal funding range.

Prince Edward Island’s workers’ compensation board was the most overfunded — its assets were 159 per cent higher than its total liabilities.

New Brunswick’s board had a funding ratio of 112 per cent, which was just above the CFIB’s ideal threshold, followed by Newfoundland and Labrador (126 per cent), Saskatchewan and Alberta ( both at 133 per cent). British Columbia, Manitoba and Yukon had funding ranges in the 140 per cent area.

“While some might view boards as being prudent, it’s important to remember that the … funding for workers’ compensation comes solely from employers,” CFIB senior research analyst and report author Marvin Cruz said in a release, adding, “it’s only fair to return the extra funds to small business.”

Many workers’ compensation boards have paid out “surplus distributions” to employers when they have exceeded their desired funding ratio. In 2015, for example, Alberta’s board sent employers $200 cheques after the board determined its funding ratio was in excess of its targeted rate of 128 per cent.

The Alberta board sets its targeted funding ratio between 114 per cent and 128 per cent “to absorb the variability of the capital markets and their effect on our investment portfolio,” according to a fact sheet distributed to employers.