TORONTO, May 7 /CNW/ - Ontario's Workplace Safety and Insurance Board
(WSIB) has released its unaudited financial report for the fourth quarter of
2008, available today on the WSIB's website. The report shows the financial
status of Ontario's workplace safety and insurance system at the conclusion of
a year of unprecedented global financial downturn.
"Despite investment market declines, the WSIB's ability to fund the
ongoing obligations of the workplace safety and insurance system remains
secure. Benefits for injured workers are not impacted, and the WSIB remains
committed to the retirement of the unfunded liability," said Jill Hutcheon,
WSIB President and CEO. "This long-term goal of a fully-funded system makes
sense for the system, and it makes sense for the Ontario economy."
The costs of running Ontario's workplace safety and insurance system have
been impacted by the increases to benefit costs, as well as the WSIB's
continuing commitment to supporting Ontario businesses through three years of
stable premium rates. Investment in changing community attitudes to workplace
health and safety remains a key priority for the WSIB.
To meet the economic challenges currently being faced, the WSIB is being
creative, innovative, and collaborative as it looks for administrative
efficiencies that will help to reduce costs while maintaining the high levels
of service that Ontario's workers and employers are used to experiencing when
they deal with the WSIB.
"The WSIB continues to review its administration and health care expenses
to identify areas where further costs can be reduced and efficiency can be
enhanced," said Hutcheon. "Efficiency efforts in 2008 have resulted in savings
of $10 million from administration expenses. WSIB administration costs, at 13
per cent of revenue, compare favourably with the average of 19 per cent for
Canadian workers compensation boards."
"At the same time, we are critically evaluating all of our programs,
services, and initiatives to identify work that can be deferred or streamlined
while maintaining service levels and progress on the road to zero workplace
injuries and illnesses."
The WSIB has not been isolated from the global economic situation. Like
many large investors, its balance sheet for 2008 shows the effects of the
economic downturn. Between end-of-year 2007 and 2008, the WSIB's unfunded
liability (UFL) is expected to have increased from $8.1 billion to $11.5
billion. The market downturn means that the WSIB will not be able to achieve
its original target of 2014 for full funding of the workplace safety and
insurance system, i.e., the elimination of the UFL. The UFL is about projected
future costs of claims already in the system that can extend 30 to 40 years
down the road.
The WSIB's increased UFL is due in large part to disappointing investment
returns - which are no different than those being experienced in world
markets. The WSIB's investment strategy allowed it to have better returns than
many other Canadian pension funds. The WSIB's investment performance for the
year (-15.5 per cent) still outperformed the median return for large Canadian
pension funds (which were in the range of -16.0 per cent to -18.0 per cent).
The WSIB has achieved a positive average rate of return on its
investments for the past 15 years of 6.6 per cent, which is aligned with the
objective of a 7.0 per cent return over the long term.
To address the rapidly changing financial market uncertainties, the WSIB
has taken steps to diversify drivers of investment performance, as well as
strengthening governance and oversight through additional financial expertise
on the Board of Directors.
The WSIB is looking comprehensively and carefully at the way the system
is financed. To do this, it needs the help of its stakeholders. That is why
WSIB Chair Steven W. Mahoney has launched an extensive program of consultation
to hear from employers and workers across the province. This will be an
opportunity to discuss issues facing the workplace safety and insurance
system, including the UFL and premium rate setting.
"Under the leadership and direction of its Board of Directors, the WSIB
has already begun an extensive consultation process with the aim of creating a
broad consensus among its stakeholders," said Mahoney. "As a significant
player in Ontario's overall economic health, the WSIB is examining its
programs and services with the help and support of stakeholders, and with a
renewed economic lens."
"To achieve our common goal - a sustainable future for Ontario's
workplace safety and insurance system - we must all work together to build
effective solutions," concluded Mahoney.
The WSIB plans to release quarterly financial reports to stakeholders via
its website on an ongoing basis.
Ontario's Workplace Safety and Insurance Board (WSIB) plays a key role in
the province's occupational health and safety system. The WSIB administers
no-fault workplace insurance for employers and their workers and is committed
to the prevention of workplace injuries and illnesses. The WSIB provides
disability benefits, monitors the quality of healthcare, and assists in early
and safe return to work for workers who are injured on the job or contract an
For further information:
For further information: Christine Arnott, WSIB Media Relations, (416)