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Alberta WCB defies good practice by keeping surplus funds: ACA

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by Russell Hixson

An independent review panel has presented the Alberta government with recommendations to modernize its Workers’ Compensation Board (WCB).
Alberta WCB defies good practice by keeping surplus funds: ACA

But a first glance has some construction industry stakeholders concerned.

The WCB system provides no-fault benefits and supports a safe return to work for injured workers. The last comprehensive review of the WCB system was conducted more than 15 years ago.

The latest 189-page report includes 60 recommendations to government.

"We committed to reviewing the Workers' Compensation Board to ensure it provides fair compensation and meaningful rehabilitation in a way that is sustainable and affordable," said Christina Gray, Alberta minister of labour, in a statement. "I thank the panel for their expertise and their hard work in putting together this report. Our government will be reviewing the recommendations over the coming months before making any legislative changes."

The Alberta Construction Association (ACA) intends to take a long, hard look at the report, but there was one red flag that immediately jumped out, said executive director Ken Gibson. The current surplus collected last year continues to be held in trust by the WCB.

"It is just flat out wrong," he explained. "It flies in the face of logic and good practice."

Gibson argued that employers should receive the refund owing and the WCB should not continue to hold it back for future policy changes.

"That surplus has nothing to do with those future changes," Gibson said. "It is money that is owed to the employers."

One of the report's recommendations calls for an end the current practice of distributing surplus money from the Accident Fund to employers and to establish a new policy for the use of excess Accident Fund moneys.

One of the current features of the WCB Funding Policy is that the board can choose to distribute a portion of excess investment returns to employers if and when the Accident Fund exceeds its 128 per cent threshold.

According to the review report, this has been done eight times over the past 12 years. The report states that there is some misinformation surrounding the idea of a "surplus" and who it belongs to.

"Surplus in the Accident Fund (i.e., when the fund exceeds the target range) does not arise from the WCB over-charging employers when rates are set," reads the report. "Rather, it arises from the WCB doing a better job than expected when investing the Accident Fund."

The review panel argues that when a distribution of surplus is made to employers, this money is not a portion of the premiums that were collected from employers. The money is a fraction of the excess interest moneys that the WCB realized through its successful investment of the Accident Fund.

"To some people this is matter of semantics, but it is an important distinction because it engages the issue of who rightly can or should lay claim to these moneys," states the report. "The most accurate description is that the Accident Fund contains moneys in trust for the benefit of workers and employers to support a sustainable workers' compensation system."

The WCB review was launched in March 2016 as part of the Government of Alberta's formal review of agencies, boards and commissions. It also included the Appeals Commission for Alberta Workers' Compensation and the Medical Panel Office.

Human resources and labour relations consultant Mia Norrie chaired the panel alongside members John Carpenter, a partner with Chivers Carpenter law firm, and labour relations consultant Pemme Cunliffe. During the course of the review, the panel received approximately 1,700 questionnaire responses and more than 500 written submissions.

"We are confident that these recommended changes will protect the future stability of the WCB, while ensuring that the needs of injured workers are addressed in a fair and transparent manner," said Norrie. "We are extremely grateful to those individuals and organizations that gave their perspectives and we trust that all participants will see their input reflected in the final recommendations."

Alberta WCB defies good practice by keeping surplus funds: ACA

One comment

  • # 1

    Doug Jones

    Truly this reads as a process change The WCB of Alberta is trying to push through in order to increase profits as opposed to rewarding the performance of companies and corporations who go above and beyond when it comes to the safety and care of their employees.

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