Preamble:  The Workers Compensation Act mandates the Workers Compensation Board (WCB) to promote safety and health in workplaces and prevent and reduce the occurrence of workplace injuries and disease.  However, the WCB has engaged made investments beyond the organization’s mandate making speculative investments in retail and residential property in Ontario, Alberta, and in Manitoba that have no relation to its mandate or operations of the WCB. 

Resolution:  The Workers Compensation Board of Manitoba liquidate all speculative property investments not related to its operations and services.

 

Resolution Report:  

The Manitoba Chambers of Commerce produces Resolution reports as part of its commitment to be accountable to its members. The reports are updated as matters unfold and have three components:

MCC Advocacy: Specific activities the MCC has done to help make this Resolution a reality. 

Developments:  Events (e.g. government action, media coverage) that relate to Resolution. 

Current Status: The MCC’s current plans to help make this Resolution a reality. 

Advice, comments, and information sharing are welcome; simply enter a reply at the bottom of this post.

 

MCC Advocacy: 

April 16, May 6 and May 7, 2009: The 2009-2010 Resolutions were posted on the MCC website, listed as part of a comprehensive Report on AGM 2009 and then notice of this story was circulated through the MCC e-Omnibus which is sent to all MCC members, Media and Government.

May 19, 2009: Resolution books were sent to every MLA and every Member of Parliament that hails from Manitoba. The following had this Resolution specifically drawn to their attention with a detailed letter setting out the background to this issue, Government initiatives (where applicable), and an argument for the Resolution:

• The Minister of Labour and Immigration  

May 19, 2009: Raised this issue with the Manitoba employers Council (MEC), a collecting of various businesses and business associations that review and respond to labour and employment issues. The MEC agreed to look into the issue.

July 15, 2009: The MCC E-Update provided notice of new developments on this issue. The E-Update was circulated sent to all MCC members, Media and Government.

August 26, 2009: Spoke to the local chamber that sponsored this Resolution, sharing information and brainstorming ways to move this issue forward.    

 

Developments:

July 13, 2009: The Manitoba Chambers of Commerce received a letter from the Minister of Labour and Immigration on this matter. That letter responded to the Resolution as follows:

The Workers Compensation Board of Manitoba has requirements under The Workers Compensation Act (the Act) to operate on a fully funded basis. Full funding ensures that current employers pay for the current and future costs of existing compensable injuries and their administration, rather than future generations of employers paying for those injuries.

The accident fund reserve is invested in a diversified portfolio of investments. Income from the investment portfolio is an important source of revenue for the WCB, and reduces the amount of employer premiums required to fund the compensation system on an annual basis. The WCBs investment portfolio has been one on of the top performers as compared to other WCB jurisdictions across Canada, which has assisted Manitoba in having one of the lowest average premium rates in the country.

The WCBs objective in the investment of the accident fund is to generate a consistent, positive, real rate of return that will provide for payment of all liabilities as required. No single asset class will accomplish this objective, so the portfolio is diversified across a number of asset classes, including commercial real estate.

The real estate portfolio is also diversified by including different types of properties, and by owning properties in different geographical areas. Diversification by property type and geographical location limits the exposure of the portfolio in the event of a downturn in a particular market. More detail about the management of the investment portfolio is contained in the WCBs Statement of Investment Policies and Objectives which can be found at: http://www.wcb.mb.ca/. [Editor's note: the direct link is here]

I would like to add that as a result of the recent audit of the WCB by the Office of the Auditor General and amendments to The Workers Compensation Act, the WCB has implemented organizational improvements, including in its management of investments. This has strengthened the WCBs ability to operate a well-diversified and balanced investment portfolio.   

 

Final Report:

Both the Government and the WCB remained steadfast in the view that they have detailed protocols for investments, protocols worked out with the consensus of the business representatives, and that those protocols are sound. That said; some Government representatives seemed open to the idea of pursuing a review or discussion of whether the WCB should be careful in rural communities to make sure that its real estate investments do not crowd out private sector investment. 

This Resolution needs more work.