Standing Committee on Crown Corporations Annual Report 2017

February 1, 2019

WorkSafeNB is a crown corporation:

• reporting to the Minister of Post-secondary Education, Training and Labour

• committed to preventing workplace injuries and illnesses

• administering no-fault workplace accident insurance

• providing rehabilitation and return to work support following a workplace injury

Who we are

2

Workers’ compensation is founded on five principles that form the foundation for what is known as the ‘historic compromise’ between workers and employers.

1. No-fault compensation benefits

2. Security of benefits

3. Collective liability

4. Independent administration

5. Exclusive jurisdiction

Meredith Principles

3

Employer premiums cover costs related to:

• Occupational health and safety requirements

• Wage loss compensation

• Medical care and rehabilitation for injured workers

• WorkSafeNB administration costs

• Workers’ Compensation Appeals Tribunal and worker and employer advocates

Fully funded by employers

4

Largest Sectors

15,000 registered employers

• 30,000 workplaces

• ≈ 80% of employers have <10 employees

• ≈ 92% of employers have < 20 employees

300,000 workers

• ≈ 5,500 claims/yr where worker misses time from work due to workplace injury

• ≈ 5,600 claims/yr where medical treatment required for workplace injury but no time is missed from work due to workplace injury

Construction Retail

Health Care

Employer by Size (payroll)

Large 3.5%

Medium 15.6%

Small 80.9%

>$2.5M >$0.5M 5

Who we serve

• Workplace Health Safety Compensation Commission and Workers’ Compensation Appeals Tribunal Act

• Workers’ Compensation Act

• Occupational Health and Safety Act

• Silicosis Compensation Act

• Firefighters’ Compensation Act

Applicable legislation

6

5

Assessment rate history

$2.04 $2.01 $2.12 $2.02 $1.70

$1.44 $1.21 $1.11 $1.11

$1.48 $1.70

$2.92 ↓

$2.65

$0.50$1.00$1.50$2.00$2.50$3.00$3.50$4.00

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

7

Benefit costs and revenue: assessed employers (mostly private sector)

8

139 144 146 146 149 150 158 169 187 208 221

37 13 10

-13

0 14 38

104 127

191 178

153 156 168 162 139 116

99 94 97 135 159

-162

130 93

25 111 176

104 55

105

132 34

-200

-100

0

100

200

300

400

500

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

$ M

illio

ns

In year costs Increase in future liabilities Assessment revenue Investment revenue

177 -9 156

157

285

164

250

149 187

132

262

400

202

314

149

273

203 196

292 268

193

399

expenses > income by $573 million income > expenses by $338 million

2018F

Legislative change April 2015

Legislative change December 2018

Benefit costs and revenue: self-Insured (mostly public sector)

9

32 30 31 32 32 36 43 44 55 60

69 14

5 1

(4) (7)

6 6

22

61 62

51

(30)

(10)

10

30

50

70

90

110

130

150

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

$ M

illio

ns

In year costs Increase in future liabilities

35

46

32

27

25

42

49

66

115

123

120

9

Legislative change April 2015

Legislative change December 2018

2018F

Key financial metrics ($ millions)

2014 2015 2016 2017 2018 Forecast

Assets $1,521 $1,520 $1,594 $1,709 $1,728

Liabilities $1,108 $1,234 $1,422 $1,671 $1,898

Net Income $7 -$126 -$114 -$134 -$207 to -$237

Funding Position $413 $287 $172 $37 -$170 to-$200

Funding Level 137% 123% 112% 102% 88% - 91%

10

Lost-time claims by type of injury

0

500

1000

1500

2000

2500

Sprain, strain and pain Bruises, Contusions Severe and External

11

Workplace related fatalities

0

5

10

15

20

25

2012 2013 2014 2015 2016 2017 2018In year accidents Prior Year Accidents 12

1.09 1.39 1.46 1.47 1.54

1.83 1.86 1.89 2.21

2.82

0

1

2

3

4

ON AB NB PE NL NS SK QC NT/NU MB

2017 Lost-time injury frequency per 100 workers

13 Source: Association of Workers’ Compensation Boards of Canada Detailed Key Statistical Measures (KSM) Report - 2017

Average benefit cost per lost-time claim ($ thousands)

38 36 36 34 33 27 26

23 20

12

0

10

20

30

40

50

NB NT/NU ON AB NS NL QC BC PE MB

14 Source: Association of Workers’ Compensation Boards of Canada Detailed Key Statistical Measures (KSM) Report - 2017

Average duration of claim (days) 129

117 105

71 70

34

020406080

100120140

NL NS NB AB PE MB

% of claims on wage loss benefits after two years 7

6 6 6

4 3 3 3

2 1

0

2

4

6

8

15 Source: Association of Workers’ Compensation Boards of Canada Detailed Key Statistical Measures (KSM) Report - 2017

Claim duration

Average days from workplace injury to registration of claim

16

11 8 8

6 5 5 4

0

6

12

18

Average days from injury to first payment

50

37 32 29 24 24 23

8

0

20

40

60

16 Source: Association of Workers’ Compensation Boards of Canada Detailed Key Statistical Measures (KSM) Report - 2017

Time to act

17

Other comparators by province Province 2019

Rate Mandatory RTW / Modified Duties Program

Incentive to Report Accidents on Time and Accurately

Maximum Insurable earnings

NB $2.65 No No $64,800

ON $1.65 Yes - 2011 Yes Penalties of $250 - $1000

$92,600

MB $0.95 Yes - 2007 Yes Fine of $500 and published

$127,000

AB $1.08 Yes - 2018 Yes Various

_

Hearing loss claims

0

500

1000

1500

2000

2500

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

$12M in payments annually $315M in liabilities

18

Administration costs In 2017, administration costs increased by a total of $4.4M

Administration and open claims

Open claim count

2017

Increase in front-line staff $3.5M

Building operations $0.5M

WCAT & Advocates $0.4M

1322 1459

2048 2236

2403

0500

1000150020002500

2014 2015 2016 2017 2018

19

2019 Rate – administration costs

20

0.19

$0.17

$0.09

$0.06

$0.05 $0.04

Claims & Rehabilitation

General & Administration

Business Transformation

OHS Compliance

OHS Education & Prevention

WCAT & Advocates

Investment returns

5 year average 8 year average 10 year average

WorkSafeNB 9.6% 9.0% 7.2% Vestcor* 9.4% 8.5% 6.5% Long-term target 6.6%

-20%

-10%

0%

10%

20%2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

WorkSafeNBVestcor PSPP Composite

21 Source: Vestcor NBPSPP Annual Report

Workers’ Compensation Appeals Tribunal decision trends

Claims Accepted Appeals Overturns Overturn

Rate

2015 9,749 255 226 89%

2016 10,467 413 368 89%

2017 11, 168 355 257 72%

2018 11,205 293 143 49%

2.6

3.9

3.2

2.6 2.3

3.5

2.3

1.3

0%

1%

2%

3%

4%

2015 2016 2017 2018Appealed Overturned

22 *There are multiple decisions on each accepted claim

Key findings • Government diminished WorkSafeNB’s independence and

impacted operations

• WorkSafeNB strategic plan needs improvement

• Board practices require improvement

• Compensation and benefits not aligned with government

expectation

Auditor General Audit – Governance Phase 1, June 2018

23

Task Force recommendations July 2018

24

Key recommendations • Return policy deference to Board of Directors

• Occupational health and safety improvements

• Eliminate three-day unpaid waiting period

• Enhance rehabilitation and return to work practices

• Enhance governance

Key findings Overall, WorkSafeNB’s claims management framework is reasonable and policies are consistent with best practices.

• Time sensitive treatments can be delayed

• Ineffective claims system lacks automation

• “Return to work” goal not embedded in WorkSafeNB

processes

Auditor General audit – claims management Phase 2, January 2019

25

Legislative change Task Force & AG Recommendations Year

Bill 2 – Workplace Health, Safety and Compensation Commission and Workers' Compensation Appeals Tribunal Act, Workers' Compensation Act, Firefighters' Compensation Act

December 2018

Occupational Health and Safety Act, Workers' Compensation Act, Workplace Health, Safety and Compensation Commission and Workers' Compensation Appeals Tribunal Act, Workers' Compensation Act, Firefighters' Compensation Act

Spring 2019

26

Comprehensive Legislative Review Year

Workers' Compensation Act, Workplace Health, Safety and Compensation Commission and Workers' Compensation Appeals Tribunal Act

Fall 2019

Workers' Compensation Act, Firefighters' Compensation Act, Blind Workers’ Compensation Act, Silicosis Compensation Act

2020 - 2021

OHS Act 2022 - 2023

26

Moving on recommendations

People

Technology

Process Improvements

Communications

What we are doing:

WorkSafeNB transformation underway

27

New strategic plan: The four strategic pillars

Full legislation, regulation and policy update

Keep people safe at work

Improve our care and support model (RTW)

Modernize technology

28

Focus areas

Cannabis and impairment OHS App Opioids

29

Thank you

Questions?

30