New research shows WCB surplus rebate will provide needed help for Manitoba’s small businesses and employees
Winnipeg, May 3, 2019 – The Canadian Federation of Independent Business (CFIB) is pleased that the Workers Compensation Board (WCB) of Manitoba has announced it is rebating $74 million of the Board’s surplus premiums back to the province’s employers in 2019. This rebate amounts to a credit of 40 per cent of each employer’s 2018 premiums paid. However, employers will be disappointed the entire surplus was not rebated as the Board remains significantly overfunded beyond its 130 per cent targeted funding ratio (total assets over total liabilities).
“It has been a long battle to get employers’ money back from WCB, but we are pleased to see that the first $74 million of the surplus will be applied to accounts later this month,” said Jonathan Alward, CFIB’s Director of Provincial Affairs for Manitoba. “During the last three years, CFIB collected over 3,000 signed petitions, presented compelling data, released reports, and met with WCB’s President and CEO to urge the Board to rethink its rebate policy and return the entire surplus back to employers.”
In a letter to the WCB’s Board of Directors on February 21st, CFIB urged the WCB to refund the entire surplus amount to employers back in 2019. CFIB also highlighted new research that revealed Manitoba’s business owners would use their rebates to increase employee compensation (42%) and invest in new equipment (42%), among others.
“This help can’t come soon enough as Manitoba’s small businesses are facing a barrage of cost increases including the federal tax changes, Canada Pension Plan premium increases, and the recently imposed federal carbon tax,” added Alward.
CFIB surveyed Manitoba small business owners in October and November of last year, and received 274 responses. When asked: If the Workers Compensation Board of Manitoba (WCB) decides to provide a surplus rebate to employers, how would your business use these funds? (Select as many as apply):
- 42% said they would increase employee compensation (salary and benefits);
- Another 42% said they would invest in new equipment;
- 36% would pay down debt;
- 27% would invest in additional safety training and equipment for employees;
- Another 27% would invest in additional employee training (other than safety-related);
- 17% would lower or maintain prices; and
- 16% would hire additional employees.
“Business owners tell us they will use their rebate cheque to increase their employee compensation and invest in new equipment to grow, as well as invest in additional safety training and equipment for employees,” noted Alward. “From the welding shop in Brandon to the restaurant in Steinbach, these funds will help employers navigate a challenging economy.
Concerns remain about WCB’s overfunded position
WCB funding is paid for by employers and was estimated to be funded at 148.8 per cent (total assets over total liabilities) to begin 2018. This is well above WCB’s targeted funding ratio of 130 per cent, or $254 million overfunded. The funded position to begin 2019 has not yet been released.
While the $74 million surplus rebate is welcomed news for Manitoba’s small business owners, the funded position remains well beyond the targeted funding ratio of 130 per cent. CFIB has advocated for surpluses beyond the targeted funding ratio (130%) to be rebated back to employers in the year they are realized.
“The Board is headed in the right direction today with the first surplus rebate announced while rates remain the lowest in the country. However, employers deserve to have the entire surplus returned this year. CFIB will continue to push the Board to change its rebate policy to one that better respects employers’ money, while continuing to be fully funded for those it serves,” concluded Alward.
To arrange an interview with Jonathan Alward, Director of Provincial Affairs for Manitoba, please call 204-982-0817 or email [email protected]. You can also follow CFIB Manitoba on Twitter @cfibMB.
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 110,000 members (4,800 in Manitoba) across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.