WORKERS COMPENSATION BOARDOF PRINCE EDWARD ISLAND

ANNUALREPORT2003

ANNUALREPORT2003

Promoting Safe Workplaces...Protecting Employers and WorkersPromoting Safe Workplaces...Protecting Employers and Workers

Our MissionPromoting Safe Workplaces ... Protecting Employers and WorkersWCB exists to promote safe workplaces and to protect employers and injured workers through a sustainable accident insurance program.

Our Values• We treat people with fairness, care and respect

• We communicate in an open and honest manner

• We are accountable to the public and our stakeholders

• We believe in teamwork and are committed to continually improving our services

• We foster trust

• We act with integrity and professionalism

Our Organization

BOARD OF DIRECTORS

INTERNALRECONSIDERATION

CLIENT SERVICES OCCUPATIONALHEALTH AND SAFETY CORPORATE SERVICES HUMAN RESOURCES

CHIEF EXECUTIVEOFFICER

Table of ContentsOur Mission - Our Values - Our Organization i

Table of Contents 1

Letter of Transmittal 2

Board of Directors 3

Message from the Chair 4

Message from the Chief Executive Officer 6

Strategic Plan "Highlights" 2001 - 2006 9

Creating Safe and Healthy Workplaces for Islanders 9

Quality Service for Injured Workers 11

Focused on Operational Effectiveness 13

Quality Service through People 15

Financial Information 16

Actuarial Certificate 17

Auditors’ Report 18

Financial Statements 19

Notes to the Financial Statements 22

Statistical Summary 30

External Reports 42

Workers Compensation Appeal Tribunal 43

1

Annual Report 2003 – Table of Contents

Letter of Transmittal

Annual Report 2003 – Letter of Transmittal

2

Board of Directors

The WCB Board of Directors: seated from left are Donna Butler, JamesLee (chair), Joyce McCardle (vice-chair); standing from left are RayGallant and Blake Craig. The Board is comprised equally of represen-tatives from employers and workers with an independent chairperson.

Annual Report 2003 – Board of Directors

3

Message from the ChairThrough relentless focus on strategic planning goals, the Workers CompensationBoard of Prince Edward Island has achieved solid results in 2003. The Board consis-tently achieved objectives targeted at improving the workers compensation system oftoday while at the same time securing its sustainability for the workers and employ-ers of tomorrow. In 2003 we made significant improvements to our long term finan-cial viability, increased our efforts to foster a healthy and safe employment environ-ment for Prince Edward Island, and demonstrated our commitment to accountabili-ty through effective communication with our stakeholders.

Our 2003 Annual Report clearly illustrates significant financial improvement.Accomplishments in 2003 toward our goal of a financially stable workers compensation system include positivefinancial statement results, meeting year two objectives in our strategy to eliminate the unfunded liability,communicating financial condition trends to staff and stakeholders, and close monitoring of performancemeasures in terms of service, prevention and financials.

Just as important to the long term success of our workers compensation system is the support we have provid-ed in the creation of safe and healthy workplaces and in the prevention of workplace accidents. Our commit-ment to making Prince Edward Island a safer and healthier place to live and work in 2003 was evident. Wehosted the 4th Annual Workplace Health and Safety Conference in Charlottetown and attracted a recordnumber of delegates to this world class event. Furthermore, we recommended to government amendments tothe Occupational Health and Safety Act and regulations, assisted the Department of Health and SocialServices with implementation of the Smoke-free Places Act, and continued to promote “Safety First” thinkingfor all compensation system stakeholders.

Our focus on youth health and safety was also a priority in 2003. We have worked with the Department ofEducation to implement occupational health and safety principles in the provincial school system and arecommitted to an on-going partnership in the development of health and safety resources for elementary,junior and senior high levels. The Board has actively participated in provincial and national initiatives aimedat increasing awareness and targeting workplace health and safety messages toward young workers and theemployers of young workers.

We have made significant progress in 2003 in terms of our financial goals and workplace health and safetyefforts. I believe much of this was accomplished through the diligent efforts of our staff together with anincreased focus on effective communication with our stakeholders. In 2003 we implemented a comprehensiveimprovement plan in response to feedback received from the 2002 Injured Worker Survey, conducted our firstEmployer Satisfaction Survey and re-affirmed our commitment to continuous improvement through a pro-gram of bi-annual stakeholder surveys. Survey feedback gives us a better understanding of the needs andexpectations of our stakeholders and in turn helps us define our focus.

In closing, I want to express my appreciation to the Board of Directors and to the staff of WCB for a job welldone in 2003. We are committed to being accountable and providing a fair system for the workers andemployers of PEI. Stakeholders can be assured that objectives set for 2004 will continue us on this positivepath and carry us into the future.

James M. LeeChair

Annual Report 2003 – Message from the Chair

4

Message du présidentGrâce à la priorité de tous les instants qu’elle a accordée aux objectifs de planificationstratégique, la Commission des accidents du travail de l’Île-du-Prince-Édouard a atteint desolides résultats en 2003. La Commission a invariablement atteint des objectifs ciblés surl’amélioration du système d’indemnisation des travailleurs d’aujourd’hui tout en assurant saviabilité pour les travailleurs et les employeurs de demain. En 2003, nous avons fait des pro-grès significatifs en terme de viabilité financière à long terme, nous nous sommes efforcés defavoriser un milieu de travail sain et sécuritaire à l’Île- du-Prince-Édouard et nous avons faitpreuve de responsabilisation au moyen de communications efficaces avec nos partenaires.

Notre rapport annuel de 2003 met en lumière des améliorations financières importantes.Dans le sens de nos objectifs consistant à rendre le système d’indemnisation des travailleursfinancièrement stable, nous avons réussi entre autres choses, en 2003, à atteindre des états financiers positifs, à rencon-trer les objectifs de la deuxième année de notre stratégie consistant à éliminer les dettes non provisionnées, à communi-quer les tendances de la situation financière au personnel et aux partenaires, et à surveiller étroitement les mesures derendement en termes de service, de prévention et d’états financiers.

L’appui que nous avons accordé à la création de milieux de travail sains et sécuritaires et à la prévention des accidentsen milieu de travail est tout aussi important pour le succès à long terme de notre système d’indemnisation des tra-vailleurs. Notre engagement à faire de l’Île-du-Prince-Édouard un endroit sain et sécuritaire en 2003 était évident. Nousavons accueilli la 4e conférence annuelle sur la santé et la sécurité au travail à Charlottetown, et nous avons attiré unnombre record de délégués à cet événement de classe mondiale. De plus, nous avons recommandé au gouvernementdes modifications à la Occupational Health and Safety Act (Loi sur la santé et la sécurité au travail) et à ses règlements,nous avons aidé le ministère de la Santé et des Services sociaux à mettre en application la Smoke-free Places Act (Loisur les endroits sans fumée), et nous avons continué de faire la promotion de l’idée « La santé d’abord » auprès de nospartenaires du système d’indemnisation.

En 2003, nous avons accordé une attention toute particulière à la santé et à la sécurité des jeunes. Nous avons travailléavec le ministère de l’Éducation pour intégrer les principes de santé et de sécurité au travail dans le système scolaireprovincial, et nous nous sommes engagés dans un partenariat continu pour développer des ressources concernant lasanté et la sécurité auprès de l’élémentaire, et du secondaire de premier et de deuxième cycle. La Commission a par-ticipé activement à des projets provinciaux et nationaux visant à sensibiliser les jeunes travailleurs et les employeurs dejeunes travailleurs aux messages sur la santé et la sécurité en milieu de travail.

Nous avons fait des progrès importants en 2003 en termes de nos objectifs financiers et de nos efforts pour faire valoir lasanté et la sécurité au travail. Je crois qu’un bonne partie de cela a été réalisée grâce aux efforts assidus de notre person-nel et aux communications efficaces avec nos partenaires. En 2003, nous avons mis à exécution un plan d’améliorationdétaillé en réponse aux commentaires reçus en 2002 dans notre enquête auprès des travailleurs blessés; nous avonségalement mené notre première enquête sur la satisfaction de l’employeur et nous avons réitéré notre engagement ànous améliorer au moyen d’un programme d’enquête semestriel auprès de nos partenaires. Les commentaires tirés denos enquêtes nous font mieux comprendre les besoins et les attentes de nos partenaires, et en retour nous aident àdéfinir nos priorités.

En terminant, je veux exprimer ma reconnaissance au conseil d’administration et au personnel de la CAT pour son bontravail en 2003. Nous nous sommes engagés à être responsables et à offrir un système équitable aux travailleurs et auxemployeurs de l’Î.-P.-É. Nos partenaires peuvent être assurés que nos objectifs formulés pour 2004 vont nous garder danscette trajectoire positive et nous porter vers le futur.

Le président,

James M. Lee

Annual Report 2003 – Message du président

5

Message From the Chief Executive OfficerIn 2003, the Workers Compensation Board of Prince Edward Island madeprogress in key areas of service delivery. We focused on improving services forworkers and employers and remained steadfast in our commitment to workplacehealth and safety.

Regular communication with our stakeholders is essential to the improvementof our services. In 2002 we surveyed injured workers on Prince Edward Islandand received important feedback about their needs and expectations. Inresponse to this, we launched an action plan in 2003 with aims to better the sys-tem as a whole. Also in 2003, employers were surveyed for their input on thequality of WCB services received and with their feedback we will develop anaction plan for implementation in 2004.

Developing and communicating WCB policy to our stakeholders is another area of focus for our organi-zation. In 2003 we created the Policy Insider which offers up-to-date information on new policy andamendments, and also provides avenues for input. Other areas of concentration for WCB included infor-mation sessions with workers and employers about return to work and its benefits, expanded availabilityof our monthly assessment payment option for employers, and a province wide classification and rate set-ting review to address the needs of Island employers.

Our continued effort toward the promotion of workplace health and safety in Prince Edward Island wasevident in 2003. We hosted the 4th annual workplace health and safety conference in Charlottetown,partnered with the PEI Department of Health and Social Services in implementing the Smoke-freePlaces Act and supported the work of the Occupational Health and Safety Advisory Council, who com-pleted a major review of the Occupational Health and Safety Act regulations.

In regard to young worker safety education, we worked with the PEI Department of Education to success-fully integrate our “Stella the Safety Skunk” resource package into the provincial school system forGrades 1-3 and completed the development of the Smart Start resource materials for a Grade 9 healthand safety unit. We were also pleased to work with the provincial representative of the Cross CanadaYouth Advisory Committee on the development of the national JobSafe website, as well as the Think you are Invincible campaign for youth. These initiatives, along with further work at theelementary and junior high levels, are aimed at helping our future young workers to be safe at work.

Continuing to evolve our services and remain accountable to our stakeholders was paramount for theWCB in 2003. We developed a new website providing easy- to-access information on our benefits and ser-vices, as well as the opportunity to provide direct input on our policy development. We reviewed the2002 annual report with our stakeholders for their feedback, and introduced a general orientation pre-sentation on the workers compensation system to keep workers and employers better informed.

The professional development of our staff in 2003 remained a necessary component toward fosteringand maintaining a successful client-centred service culture at WCB. Toward this end, staff participated inworkshops, conferences, continuing education sessions and several staff also completed education pro-grams.

I want to thank the Board of Directors for their support and direction in 2003 and congratulate theentire staff for their continued hard work and dedication.

Carol Anne Duffy,Chief Executive Officer

Annual Report 2003 – Message from the Chief Executive Officer

6

Annual Report 2003 – Message de la directrice générale

7

Message de la directrice généraleEn 2003, la Commission des accidents du travail de l’Île-du-Prince-Édouard afait des progrès dans des aspects importants de la prestation des services.Nous nous sommes surtout intéressés à améliorer les services aux tra-vailleurs, et nous sommes demeurés résolus dans notre engagement à l’en-droit de la santé et de la sécurité dans le milieu de travail.

Il est essentiel de communiquer régulièrement avec nos partenaires afind’améliorer nos services. En 2002, nous avons interrogé les travailleursblessés de l’Île-du-Prince- Édouard et nous avons reçu des commentaires

importants au sujet de leurs besoins et de leurs attentes. En réponse à cela, nous avons mis en placeun plan d’action en 2003, dont le but est d’améliorer le système dans son ensemble. En 2003 égale-ment, Nous avons également demandé aux employeurs leurs commentaires sur la qualité des ser-vices reçus de la CAT et, à l’aide de ces commentaires, nous élaborerons un plan d’action qui seramis en place en 2004.

Élaborer et communiquer la politique de la CAT à nos partenaires est un autre domaine privilégiéde notre organisme. En 2003, nous avons créé le bulletin Policy Insider qui offre de l’information àjour sur la nouvelle politique et ses modifications, et fournit également des moyens de faire con-naître son opinion. La CAT s’est aussi intéressée entre autres choses à des séances d’informationauprès des travailleurs et des employeurs au sujet du retour au travail et de ses retombées, à l’expan-sion de notre option de paiement de l’évaluation mensuelle à tous les travailleurs, et à une classifi-cation à la grandeur de la province ainsi qu’à une révision de l’établissement des taux pour répon-dre aux besoins des employés insulaires.

Nos efforts soutenus pour faire la promotion de la santé et de la sécurité dans le milieu de travail àl’Île-du-Prince-Édouard ont été évidents en 2003. Nous avons accueilli à Charlottetown la 4e con-férence annuelle sur la santé et la sécurité au travail. Puis, en partenariat avec le ministère de laSanté et des Services sociaux de l’Î.-P.-É., nous avons mis en application la Smoke-free Places Act(Loi sur les endroits sans fumée). Enfin, nous avons appuyé le travail du Conseil consultatif enmatière de santé et de sécurité au travail, lequel a terminé une révision importante des règlementsrelevant de la Occupational Health and Safety Act (Loi sur la santé et la sécurité au travail).

En ce qui concerne l’éducation sur la sécurité des jeunes travailleurs, nous avons travaillé en collab-oration avec le ministère de l’Éducation de l’Î.-P.-É. pour réussir à intégrer dans le système scolaireprovincial, au niveau de la 1ère à la 3e année, notre trousse contenant la ressource, Stella the SafetySkunk, et nous avons fini la préparation des documents entourant la ressource Smart Start pour lebloc concernant la santé et la sécurité au niveau de la 9e année. Nous avons également été heureuxde travailler avec le représentant du Comité de consultation jeunesse pancanadien à la mise enplace du site Web national JobSafe, ainsi qu’à la campagne Think you are Invincible qui s’adressaitaux jeunes. Ces initiatives, ainsi que d’autres activités aux niveaux élémentaire et intermédiairevisaient à aider nos futurs jeunes travailleurs à travailler en toute sécurité.

8

Annual Report 2003 – Message de la directrice générale

En 2003, la CAT s’est efforcée par tous les moyens de faire progresser ses services et de demeurerresponsable à l’endroit de ses partenaires. Nous avons créé un nouveau site Web donnant des ren-seignements faciles d’accès à propos de nos indemnités et de nos services, et offrant la possibilité decommenter en direct sur l’élaboration de notre politiques. Nous avons révisé le rapport annuel de2002 avec nos partenaires pour obtenir leurs commentaires, et nous leur avons présenté une orien-tation générale sur le système de compensation des travailleurs afin de garder les travailleurs et lesemployeurs mieux informés.

En 2003, le perfectionnement professionnel de notre personnel est demeuré une composantenécessaire pour favoriser le maintien d’une culture de service orientée vers la clientèle à la CAT. Àcette fin, le personnel a participé à des ateliers, des conférences, des séances d’éducation perma-nente et plusieurs ont également suivi des programmes d’éducation.

Je veux remercier le conseil d’administration pour son appui et la direction qu’il nous a donnée, etje félicité tout le personnel pour ses efforts et son dévouement soutenus.

La directrice générale,

Carol Anne Duffy

9

Strategic Plan HighlightsOccupational Health and Safety DivisionCreating Safe and Healthy Workplaces for Islanders

SUMMARY

The Occupational Health and Safety (OH&S) Division has played a lead role in WCB’s focus onworker and employer education as key to accident prevention and “safety first” thinking in the workplace. Accomplishments in 2003 highlight WCB’s commitment to workers compensation systemimprovement through investment in prevention initiatives.

In summary, OH&S accomplishments include contributing to an overall decrease in the number ofwork place accidents in 2003 as compared to 2002, facilitating a comprehensive review of OH&Sregulations, identifying an approach for targeting reduction of soft tissue injuries, participating innational youth safety initiatives, and partnering with the Department of Education in the develop-ment and introduction of a health and safety curriculum for the PEI school system.

ACCOMPLISHMENTS - 2003

Work with the education system to establish a plan to implement Occupational Health and Safetyprinciples within the curriculum of Prince Edward Island school systems

Work with the Department of Education and develop SmartStart resource materials for Grade 9 √Pilot the implementation of SmartStart health and safety unit into Grade 9 √Investigate requirements for integration of health and safety curriculum into Grades 10-12 √

Propose Occupational Health and Safety Act amendmentsRecommend to government changes in the Occupational Health & Safety Act toaddress the need for alternate sentencing provisions and other housekeeping changes √

Recommend to government amendments to the Occupational Health and Safety Act regulationsRecommend regulatory changes to government √

Annual Report 2003 – Strategic Plan Highlights, Creating Safe and Healthy Workplaces for Islanders

STRATEGIC PLAN 2001–2006In 2001, the Workers Compensation Board developed and released its first Strategic Plan.

The Annual Report provides an excellent forum for updating stakeholders on progresstoward strategic planning goals. This section highlights, by division, significant accom-plishments in 2003 and operational objectives for 2004.

10

Integrate the “Safety First” thinking in WCB and external work sitesEncourage local youth health and safety initiatives which compliment national youth strategies √Participate in a work group with employers to investigate options to incorporatehealth and safety incentive programs in the workplace √Plan and host an annual Workplace Health and Safety Conference √

Participate in the implementation of the Smoke Free Places ActEstablish contractual arrangements with government for delivery of inspection services √Recruit smoke free places officer √Develop and implement operational procedures to guide the smoke free places officer in responding to workplace needs √Evaluate the on-going requirements for WCB involvement in providing Smoke Free Places Act inspection services √

OBJECTIVES - 2004

Work with the education system to establish a plan to implement Occupational Health and Safetyprinciples within the curriculum of Prince Edward Island school systems

Complete implementation of SmartStart health and safety unit in Grade 9Investigate options for delivery of health and safety principles into Grade 4 - 6 and Grade 7 - 8Identify an approach for integration of health and safety curriculum into Grades 10 - 12

Recommend to government amendments to the Occupational Health and Safety Act regulationsComplete draft regulations for scaffolding and fall protectionRecommend to Government an amendment to remove the exemption for non-farming activity on farm propertyIdentify on-going priorities for drafting of regulatory changes

Develop an injury prevention strategy for soft tissue injuriesInvestigate options for development and implementation of a strategy for soft tissue injury preventionImplement a public awareness campaign

Integrate the “Safety First” thinking in WCB and external work sitesFacilitate the development of a strategic plan for the Occupational Health and Safety CouncilDocument and implement a focussed prevention approach for employers who have high accident ratesCommunicate to employers a work plan to develop a health and safety orientation program for young workers Plan and host an annual Workplace Health and Safety ConferenceIdentify service indicators for the OH&S Division

Annual Report 2003 – Strategic Plan Highlights, Creating Safe and Healthy Workplaces for Islanders

WCB and the Department of Education have successfully integrat-ed the "Stella the Safety Skunk" resource package into the provincialschool system for grades 1-3.

11

Strategic Plan HighlightsClient Services DivisionQuality Service for Injured Workers

SUMMARY

The Client Services Division is committed to on-going improvement in the delivery of services to workers.

In 2003, divisional priorities included recognizing service improvement requirements identified byworkers, implementing worker survey action items, educating workers and employers on the con-cepts of timely and safe return to work, building successful working relationships with health careservice providers, and investigating new technology to support enhanced service goals.

ACCOMPLISHMENTS - 2003

Formalize service delivery contracts between WCB and service providersEstablish a process for regular updates to service delivery contracts √

Enhance physician understanding of the WCB mandateDevelop and implement a work plan which identifies 2 - 3 priority areasfor improved mutual understanding of respective roles and responsibilities √

Investigate possible options for third party payment of service providersIdentify potential third parties for payment of physician claims √

Enhance the two-tier service delivery modelDevelop a case audit procedure √Implement injured worker survey action plan √

Implement Workers Compensation Act amendmentsIdentify and act on opportunities to work with employers in the implementationof a new Return to Work model √

Maintain legislation, policy and workflow system which support effective service deliveryDevelop and implement priority client services procedures √

Implement service improvement through technologyIntroduce mandatory direct deposit for all long term benefit payments √Participate in discussion with Atlantic jurisdictions on common drug formulary √

Annual Report 2003 – Strategic Plan Highlights, Quality Service for Injured Workers

12

OBJECTIVES - 2004

Formalize service delivery contracts between WCB and service providersDevelop a work plan to evaluate the Return to Work effectiveness of services from service providersPlan and host an annual workshop for information sharing between WCB and service providers

Enhance physician understanding of the WCB mandatePartner with the Medical Society in the delivery of workshops for physician education

Implement a two-tier delivery model for service to injured workersImplement a case audit procedureIdentify service indicators for the Client Services Division

Implement Workers Compensation Act amendmentsImplement legislative and policy changes for chronic pain

Maintain legislation, policy and workflow system which support effective service deliveryInvestigate the options for joint procurement of medical suppliesPrepare and distribute priority communication materials to support worker understanding of benefits

Implement service improvement through technologyImplement a new client services systemReview positions and revise job descriptions to support the implementation of a new client services system

Annual Report 2003 – Strategic Plan Highlights, Quality Service for Injured Workers

Occupational Therapist, Alida Love (WCB), discusses return to work planningwith Allison Carr and Theresa Morton (Hillsborough Hospital).

13

Annual Report 2003 – Strategic Plan Highlights, Focused on Operational Effectiveness

Strategic Plan HighlightsCorporate Services DivisionFocused on Operational Effectiveness

SUMMARY

The Corporate Services Division is responsible for delivering front line services to PEI employers who fundthe workers compensation system and for developing and maintaining the internal infrastructure required forWCB to provide consistent quality services.

In summary, key result areas for the Corporate Services Division in 2003 include a continued focus on solidfinancial planning and management, conducting an employer satisfaction survey, initiating an independentreview of employer classification and rate setting systems, enhancing the WCB website and supporting organi-zational priorities in the areas such as communications, policy and procedure development, legal services, sta-tistics and information technology.

ACCOMPLISHMENTS - 2003

Monitor and communicate funding strategy statusProvide an annual update on funding strategy status in relation to documented objectives √

Monitor and communicate current financial conditionFacilitate production and present the 2002 Annual Report √Consolidate and present 2003 quarterly forecasts √Provide monthly financial condition monitoring reports √Provide reporting required to decentralize budget forecast exercise to the division/section level √

Update stakeholders on progress toward corporate goalsReview Year 3 progress toward strategic planning goals with stakeholders √Facilitate operational planning and strategic plan review for Year 4 √Develop operational plan for Year 4 √Communicate operational plan for Year 4 √

Develop and implement a process for updating stakeholders on performance results and progress toward strategic planning goals

Conduct employer satisfaction survey √Formalize results and communicate a benchmark for performance monitoringbased on employer survey results √Evaluate expansion of stakeholder satisfaction surveys to health care providers √Develop a work plan/schedule for on-going stakeholder surveys √

Establish corporate governance policies for the Board of DirectorsProvide monthly monitoring reports for the Board of Directors as defined by governance policies √Facilitate an orientation for new Board members √

Standardize a set of indicators to support on-going measurement of organizational performanceProvide standard monthly indicators √

Facilitate on-going update and communication of changes to WCB policyDevelop procedures for the maintenance of policy √Introduce a method for communicating policy updates to stakeholders √

Visit WCB's newwebsite for easy toaccess informa-tion on key pro-g rams , b ene f i t sand services. Ourwebsite address iswww.wcb.pe.ca.

14

Implement service improvement through technologyDevelop a database and application to log customer liaison communication √Investigate on-line access to the provincial business registry for integration with the employer services system √Support the implementation of mandatory direct deposit for all long term benefit payments √Introduce a web site which is focussed on service delivery √Implement a plan for long term continuous enhancement of the web site services √

Foster a mutual understanding of the role of WCB with stakeholder groupsInvestigate Access PEI sites for the decentralization of WCB services √Complete an external review of the employer classification system √Lead and participate in a work group with employers to review rate setting methodology √Conduct a media campaign to increase awareness of the workers compensationsystem and the importance of promoting health and safety in the work place √Develop an Island Focus segment to promote one aspect of worker service delivery within Client Services √

OBJECTIVES - 2004

Monitor and communicate funding strategy statusProvide an annual update on funding strategy status in relation to documented objectives

Monitor and communicate current financial conditionDocument internal budget/forecast processesInvestigate options for meeting new Generally Accepted Accounting Principles (GAAP) requirements with minimum impact on financial conditionConduct a review of medical aid payment processes

Update stakeholders on progress toward corporate goalsReview Year 4 progress toward strategic planning goals with stakeholdersFacilitate operational planning and strategic plan review for Year 5Develop operational plan for Year 5Communicate operational plan for Year 5Identify service indicators for the Corporate Services Division

Develop and implement a process for updating stakeholders on performance results and progress towardstrategic planning goals

Conduct worker satisfaction surveyFormalize worker satisfaction survey results and communicate compared to performance benchmarkDevelop and implement an action plan for employer survey resultsInvestigate options and identify an approach for communication of stakeholder satisfaction survey results

Facilitate on-going update and communication of changes to WCB policyImplement procedures for policy and procedure maintenance

Implement service improvement through technologyManage a project to implement a new client services systemDetermine feasibility and facilitate a decision on direction for on-line access to the provincial business registryImplement a plan for long term continuous enhancement of the web site servicesStandardize office automation toolsDefine and implement desktop security requirementsIdentify requirements for a new employer services system

Foster a mutual understanding of the role of WCB with stakeholder groupsDetermine feasibility and facilitate a decision on direction for use of Access PEI to decentralize WCB servicesDevelop a work plan for implementation of employer classification and rate setting system recommendationsEvaluate the use of external consulting collections services and make recommendation on the long term direction for collections workProvide support for a media campaign to increase awareness of the workers compensation system and soft tissue injury prevention

Annual Report 2003 – Strategic Plan Highlights, Focused on Operational Effectiveness

15

Annual Report 2003 – Strategic Plan Highlights, Quality Service through People

Strategic Plan HighlightsHuman Resources DivisionQuality Service through People

SUMMARY

The Human Resources section is responsible for managing personnel administration including pro-viding support for staff through times of significant change, managing recruitment challenges andimplementing organizational controls to simplify human resource management processes.

In summary, in 2003, the Human Resources section implemented required internal controls in theareas of payroll processing and personnel management, developed a work plan for the developmentof priority human resource policy and procedure, implemented a staff training and developmentpolicy and conducted an employee survey to guide organizational short and long term humanresource directions.

ACCOMPLISHMENTS - 2003

Develop a professional service and quality cultureInitiate a project to define quality service indicators and measurement criteria for each division √Finalize a work plan for the development of priority Human Resources policy and procedure √

Facilitate on-going staff developmentImplement a training and development policy √Develop an action plan to address employee survey results √

OBJECTIVES - 2004

Develop a professional service and quality cultureInitiate and manage a project to define quality service indicators and measurement criteria for each divisionImplement an action plan to address 2003 Staff Survey resultsInvestigate options for conducting future employee surveys and ensuring optimum quantitative and qualitative research related to employee satisfactionDevelop priority Human Resources policy and procedure

Facilitate on-going staff developmentDevelop and implement action plans to identify priority staff training and development requirements to meet immediate needs

16

Annual Report 2003 – Financial Information

FinancialInformation

17

We have completed an actuarial valuation of the benefits liabilities for insured employers under theWorkers Compensation Act of Prince Edward Island as at December 31, 2003, for the purpose ofproviding input to the Financial Statements of the Board.

Our estimate of the benefits liabilities of $100,965,000 represents the actuarial present value atDecember 31, 2003, of expected benefit payments of all types which will be made in future years,and which relate to claims arising from events that occurred on or before December 31, 2003. As inprevious valuations, the benefits liabilities do not include any provision for future claims related tooccupational disease or for future expenses of administration of existing claims. No allowance hasbeen made for any possible future deviations from the present policies and practices of the Boardor for the extension of new coverage types.

All liabilities have been calculated using an underlying assumption of 3.75% real rate of return oninvested assets. Rates of increase in the Consumer Price Index are assumed to be 4.0% per annum.

The liabilities, in respect of temporary wage loss, lump-sum payments, hospital, medical aid, andrehabilitation benefits, have been determined from projections of future claim payments. Theseprojections have been based on factors developed from the Board's claims experience and averagebenefit payments in recent years.

Additional information regarding our actuarial valuation is provided in our more detailed valuationreport to the Board.

We have reviewed the data which were used for the valuation to test for reasonableness and consis-tency with the data available from other sources. In our opinion, the data are sufficient and reliablefor the purpose of this valuation.

In our opinion, the actuarial assumptions are appropriate for the purpose of the valuation and themethods employed are consistent with sound actuarial principles. Our valuation report has beenprepared and our opinions have been given in accordance with accepted actuarial principles.

Paul G. Conrad FCIA, FSA, MAAAEckler Partners Ltd.March, 2004

Annual Report 2003 – Actuarial Certificate

Actuarial Certificate

18

Annual Report 2003 – Auditors’ Report

Auditors’ Report

19

Financial Statements STATEMENTS OF OPERATIONS AND UNFUNDED LIABILITY

Annual Report 2003 – Financial Statements, Stmts of Operations & Unfunded Liability

(Page 29)

20

Annual Report 2003 – Financial Statements, Balance Sheet

Financial StatementsBALANCE SHEET

21

Annual Report 2003 – Financial Statements, Statement of Cash Flows

Financial StatementsSTATEMENT OF CASH FLOWS

22

Annual Report 2003 – Financial Statements, Notes to the Financial Statements

Financial StatementsNOTES TO THE FINANCIAL STATEMENTS

23

Annual Report 2003 – Financial Statements, Notes to the Financial Statements

24

Annual Report 2003 – Financial Statements, Notes to the Financial Statements

25

Annual Report 2003 – Financial Statements, Notes to the Financial Statements

26

Annual Report 2003 – Financial Statements, Notes to the Financial Statements

27

Annual Report 2003 – Financial Statements, Notes to the Financial Statements

28

Annual Report 2003 – Financial Statements, Notes to the Financial Statements

(Page 19)

29

Annual Report 2003 – Financial Statements, Schedule of Administration Expenditures

StatisticalSummary

Annual Report 2003 – Statistical Summary

30

1986 1 1531 1586 668 3786 44 10 49 146 367 3,399,864 5,124,608

2004 1 1486 2071 1257 4815 1 2 0 155 224 17,002,311 24,915,206

2002 0 2066 2132 1531 5729 7 5 0 192 321 25,310,461 21,028,716

2000 3 2041 2132 991 5167 21 6 169 229 22,343,518 19,156,310

1998 3 2445 2811 1430 6689 18 3 85 164 281 16,590,191 18,601,376

1996 3 2099 2296 1193 5591 44 5 81 223 617 22,554,399 16,452,126

1994 3 2131 2152 1251 5537 11 5 87 173 754 16,940,625 16,171,750

1992 3 2561 2371 1101 6036 96 1 93 198 830 13,966,548 13,680,270

1990 0 2438 2205 1271 5914 54 7 49 160 550 7,241,886 8,341,288

1988 1 1927 1691 927 4546 48 10 36 117 451 5,549,695 5,826,342

1987 3 1794 1671 888 4356 39 9 44 149 444 4,949,476 5,554,416

— 0 1232 1720 1572 4524 0 3 0 134 258 20,699,908 26,743,383

2003 4 1659 2172 1510 5345 3 5 0 198 319 20,749,663 23,938,945

2001 4 2105 2180 1236 5525 9 3 0 187 286 20,096,096 19,616,511

1999 3 1818 2178 1080 5079 27 3 35 190 231 17,772,928 17,518,044

1997 2 2449 2929 1457 6837 23 4 88 218 520 16,990,032 18,553,225

1995 2 1978 2155 1185 5320 6 5 120 171 635 15,546,561 17,253,765

1993 5 2256 2294 1140 5695 47 5 83 148 754 16,286,550 15,616,903

1991 4 2457 2147 1226 5834 81 4 69 122 547 8,582,012 10,343,471

1989 3 2073 1866 1038 4980 39 10 35 127 467 6,453,715 6,022,278

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

Fata

l Acc

iden

ts

Tem

pora

ry W

age

Loss

2

Med

ical A

id O

nly

Non-

Com

pens

able

Tota

l No.

of C

laim

s

Exte

nded

Wag

e Lo

ss

CN R

ailw

ay a

nd A

ir Ca

nada

1

Mar

ine

Atla

ntic

1

Fede

ral G

over

nmen

t 1

Prov

incia

l Gov

ernm

ent 1

Cost

of C

laim

s

Asse

ssm

ents

+ + + =Repo

rting

yea

r

Rest

ated

as

of M

arch

31

Number of claims

Historical number of claims broken down by claim type as of March 31 of the follow-ing year, cost of claims incurred regardless of accident year and assessment revenue.

Claims costs/Revenues

31

Annual Report 2003 – Statistical Summary, Workplace Accident Summary

Workplace Accident Summary

1 Denoted Self Insured Employers

2 As of April 1, 2002, PEI has a waiting period equivalent to 60% of weekly compensation being requiredbefore compensation is payable, therefore the number of lost time claims listed in this report may notreflect every lost time injury for this province as of March 31 of the following year.

32

Annual Report 2003 – Statistical Summary, Cost incurred by Type of Benefit/Average Assessment Rate

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$0

2001 2002 20031994 1995 1996 1997 1998

Temporary Wage Loss Health Care Rehabilitation Extended Wage Loss Actuarial Adjustment

Summary of Cost Incurred by Type of Benefit

1999 2000

Average Assessment Rate

$0.50

$1.00

$1.50

$2.00

$2.50

$0.002002 20031994 1995 1996 1997 1998 1999

$2.29$2.39

$2.07$1.98

$2.03 $2.02 $1.97 $1.98

2000

$1.96

Costs incurred regardless of accident year, as of fiscal year end, by type of benefitincluding actuarial adjustment.

2001

$2.24

Historical target average assessment rate per $100 of assessable payroll

33

Annual Report 2003 – Statistical Summary, Assessable Earnings/Benefits/Waiting Period/Expenditure Dist.

2002 Actual

1995

$35,000

Maximum Assessable/Insurable Earnings

1996

$35,100

1998

$36,200

2000

$36,600

1999

$36,200

1997

$35,900

$30,000

$40,000

Historical Benefit LevelUntil 1951 — 66 2/3% of gross earningsEffective January 1, 1951 – 75% of gross earningsEffective January 1, 1995 – 80% (85% after 39 weeks) of net earningsEffective April 1, 2002 – 80% (85% after 38 weeks) of net earnings

Expenditure Distribution 100%

50%

Waiting periodOriginal Act — 7 daysEffective 1951 — 4 daysEffective 1962 — 1 dayEffective April 1, 2002 —60% of average weekly earnings

2001

$38,100

Historical maximum level of earnings per worker upon which employer assessments and workerbenefits are calculated.

Total and percent of costs incurred, regardlessof accident year, as of fiscal year end.

ADMINISTRATION $5,743,581 23.64%

HEALTH CARE$4,823,000 19.85%

EXTENDEDWAGE LOSS

$9,875,000 40.64%

2003 Preliminary

TEMPORARY WAGE LOSS$3,276,000 13.48%

2002 Actual2003 Preliminary

2002

$39,300

2003

$40,000

ADMINISTRATION $5,482,303 26.89%

HEALTH CARE$2,711,000 13.30%

EXTENDEDWAGE LOSS

$8,453,502 41.47%

REHAB $1,069,000 5.24%

TEMPORARY WAGE LOSS$2,671,000 13.10%

REHAB $579,000 2.38%

34

Annual Report 2003 – Statistical Summary, Benefit Cost versus Assessment Revenue

$5

$10

$15

$20

$25

$0

Benefit Cost versus Assessment Revenue 1994-2003

Benefit AssessmentCosts Revenues

$ Millions $ Millions1994 22.55 13.361995 16.99 15.791996 14.95 18.601997 18.02 17.511998 22.34 18.881999 20.09 19.612000 25.31 21.022001 20.75 23.942002 17.02 24.922003 20.70 26.74

Benefit Costs

Assessment Revenues

2002

Total Benefit Cost incurred versus total assessment revenue, regardless of accident year, as of fiscalyear end.

2001 20031994 1995 1996 1997 1998 1999 2000

35

Annual Report 2003 – Statistical Summary, Percentage Funded

20%

40%

60%

80%

100%

0%20031994 1995 1996 1997 1998 2001

120%

140%

Percentage Funded

1999 2000

Percentage of liabilities covered by assets.

2002

36

Annual Report 2003 – Statistical Summary, Temporary Wage Loss Claims – Nature of Injury

Sprains, strains 858 – 57.74%

Temporary Wage Loss Claims – Nature of Injury

Fractures 66 – 5.36%

Cuts, lacerations 91 – 7.39%

Other 83 – 6.74%

Repetitive motion 57 – 4.63%

Multiple 25 – 2.03%

2003 Preliminary 100%

50%

Based on National Work Injury Statistics Program (NWISP) codes, number and percent of tempo-rary wage loss claims, broken down by nature of injury as of March 31, 2004.

Bruises, contusions 145 – 11.77%

Sprains, strains 735 – 59.66%

2003 PreliminaryTotal number of

Temporary Wage Loss claims — 1232

Fractures 79 – 5.32%

Cuts, lacerations 138 – 9.29%

Other 88 – 5.92%

Repetitive motion 93 – 6.26%

2002 Actual

Bruises, contusions 169 – 11.37%

2002 ActualTotal number of

Temporary Wage Loss claims — 1486

Burns 30 – 2.44%

Multiple 35 – 2.36%

Burns 26 – 1.75%

37

Annual Report 2003 – Statistical Summary, Temporary Wage Loss Claims – Region of Injury

Temporary Wage Loss Claims – Region of Injury

Pelvic 2002 – 28 1.88%

Pelvic 2003 – 16 1.30%

Neck 2002 – 34 2.29%

Neck 2003 – 23 1.87%

Head 2002 – 56 3.77%

Head 2003 – 58 4.71%

Chest 2002 – 27 1.82%

Chest 2003 – 30 2.44%

Foot 2002 – 59 3.77%

Foot 2003 – 44 3.57%

Other 2002 – 29 1.95%

Other 2003 – 11 0.89%

Wrist 2002 – 72 4.85%

Wrist 2003 – 41 3.33%

Ankle 2002 – 67 4.51%

Ankle 2003 – 53 4.30%

Hand* 2002 – 42 2.83%

Hand* 2003 – 26 2.11%

Arms (above wrist) 2002 – 85 5.72%

Arms (above wrist) 2003 – 70 5.68%

Multiple body parts 2002 – 152 10.23%

Multiple body parts 2003 – 143 11.61%

Legs 2002 – 130 8.75%

Legs 2003 – 117 9.50%

Shoulders 2002 – 103 6.93%

Shoulders 2003 – 80 6.49%

Fingers 2002 – 115 7.74%

Back 2002 – 487 32.77%

Back 2003 – 426 34.58%

Fingers 2003 – 94 7.63%

*Does not include fingers

Based on National Work Injury Statistics Program (NWISP) codes, number and percent of tempo-rary wage loss claims, broken down by region of injury as of March 31, 2004.

2003 Preliminary1232 claims

2002 Actual 1486 claims

38

Annual Report 2003 – Statistical Summary, Temporary Wage Loss Claims – Cause of Injury

Temporary Wage Loss Claims – Cause of InjuryBased on National Work Injury Statistics Program (NWISP) codes, number and percent of tempo-rary wage loss claims, broken down by cause of injury as of March 31, 2004.

Struck against – 75 6.09%

Struck by – 182 14.77%

Overexertion – 291 23.62%

Bodily reaction – 326 26.46%

Fall, same level – 93 7.55%

Caught in – 32 2.68%

Fall to lower level – 94 7.63%

Other – 63 5.11%

Struck against – 98 6.59%

Struck by – 168 11.31%

Overexertion – 449 30.22%

Repetitive motion – 55 3.70%

Bodily reaction – 313 21.06%

Fall, same level – 109 7.34%

Caught in – 57 3.84%

Fall to lower level – 120 8.08%

Other – 71 4.78%

2003 Preliminary 2002 Actual

Contact with temperature extremes – 26 2.11% Contact with temperature extremes – 16 1.08%

100%

50%

2003 Preliminary 2002 Actual

Exposure to caustic, noxious substances – 25 2.03% Exposure to caustic, noxious substances – 30 2.02%

Total number ofTemporary Wage Loss

claims — 1232

Total number of Temporary Wage Loss

claims — 1486

Repetitive motion – 24 1.95%

39

Annual Report 2003 – Statistical Summary, Temporary Wage Loss Claims – Amount of Time Lost

Temporary Wage Loss Claims – Amount of Time Lost

2003 Preliminary

2002 Actual

2003 – 448 36.36%

2002 – 608 40.92%

2003 – 84 6.82%

2002 – 63 4.24%

2003 – 45 3.65%

2002 – 48 3.23%

2003 – 335 27.19%

2002 – 377 25.37%

2003 – 54 4.38%

2002 – 52 3.50%

2003 – 3 0.24%

2002 – 35 2.36%

2003 – 263 21.35%

2002 – 303 20.39%

LESS THAN 1 WEEK

OVER 12MONTHS

7-12MONTHS

2-6MONTHS

3-4 WEEKS

2-3 WEEKS

1-2 WEEKS

Number and percent of temporary wage loss claims broken down by amount of time lost from workas of March 31, 2004.

40

Annual Report 2003 – Statistical Summary, Temporary Wage Loss Claims by Industry Sector/Age at Accident

2003 2002Wholesale & retail 159 12.91% 197 13.26%Accommodation,food & beverage 100 8.12% 109 7.34%Health care 177 14.37% 234 15.75%Sales & services, other 46 3.73% 61 4.10%Forest products 13 1.06% 9 0.61%Fish processing 76 6.17% 109 7.34%Agriculture 50 4.06% 54 3.63%Food processing 87 7.06% 91 6.12%Manufacturing, other 139 11.28% 181 12.18%General construction 81 6.57% 131 8.82%Construction, other 99 8.04% 65 4.37%Transportation 56 4.55% 51 3.43%Government services 149 12.09% 194 13.06%

1232 100.00% 1486 100.00%

Temporary Wage Loss Claims by Industry Sector

2003 2002Age at Accident DateNot stated 0 0.00% 3 0.20%Less than 20 62 5.03% 81 5.45%20 to 24 146 11.85% 138 9.29%25 to 29 117 9.50% 153 10.30%30 to 34 127 10.31% 176 11.84%35 to 39 154 12.50% 200 13.46%40 to 44 177 14.37% 254 17.09%45 to 49 187 15.18% 206 13.86%50 to 54 143 11.61% 165 11.10%55 to 59 88 7.14% 74 4.98%60 to 64 27 2.19% 30 2.02%65 or older 4 0.32% 6 0.40%

1232 100.00% 1486 100.00%

Temporary Wage Loss Claims – Age at Date of Accident

Number and percent of temporary wage loss claims as of March 31, 2004, broken down by industry sector.

Number and percent of temporary wage loss claims as of March 31, 2004, by age at date of accident.

41

Annual Report 2003 – Statistical Summary, Temporary Wage Loss Claims – Gender of Worker

Male – 785 63.72%

Temporary Wage Loss Claims – Gender of Worker

Male – 918 61.78%

Female – 447 36.28% Female – 568 38.22%

2003 2002

Number and percent of temporary wage loss claims as of March 31, 2004, by gender of worker.

Total number ofTemporary Wage Loss

claims — 1232

Total number of Temporary Wage Loss

claims — 1486

42

Annual Report 2003 – External Reports

ExternalReports

43

Workers Compensation Appeal TribunalReport from Chair

The Appeal Tribunal is an independent quasi-judicial body which conducts hearings/appeals, andin so doing, operates on the principles of fairness (natural justice).

This external review panel hears appeals from interested parties, i.e., mainly injured workers oremployers who are not satisfied with a decision of the Board which conducts a full hearing and/or apaper-file review of a claim.

The Appeal Tribunal has its origins in the Worker’s Compensation Act, 1988 R.S.P.E.I. Cap. W- 7.1Sec 56 (7), which states:

There is hereby established an Appeal Tribunal consisting of a Chairperson, one or morevice-chairpersons and as many members, equal in number, representative of employersand workers respectively as the Lieutenant Governor in Council may determine, all ofwhom shall be appointed by and shall hold office at the pleasure of the LieutenantGovernor in Council.

The Tribunal is responsible for conducting a fair, impartial and objective review of the decisions ofthe Workers Compensation Board’s Internal Reconsideration Officer (IRO). The Tribunal currentlyconsists of:

CHAIRPERSON VICE-CHAIRPERSONAllen J. MacPhee, Q.C. Pamela Williams, L.L.B.

Employer Representatives: Worker Representatives:

1. Scott Dawson 1. Neil MacFadyen

2. Wally MacGillivray 2. Nancy Fitzgerald

3. Don Cudmore 3. Mike DeRoches

4. Jim Bradley

Annual Report 2003 – Workers Compensation Appeal Tribunal

44

Annual Report 2003 – Workers Compensation Appeal Tribunal

All hearings are conducted by a panel selected by the Chairperson and include the Chairperson orthe Vice-Chairperson, together with one employee and one employer representative. As theTribunal is an arms length decision making body, hearings are held in locations other than thepremises of the Workers Compensation Board.

To date there have been in excess of thirty (30) hearings, the vast majority of which involve injuredworkers whose claims predominantly involve an issue relating to compensation, be it a question ofentitlement to compensation or an adjustment/re-assessment of wage loss and/or medical aid.

A long-standing and burning issue with injured workers is the matter of chronic pain which theBoard considers a complication resulting from an injury, for which compensation may be paid fol-lowing an impairment assessment pursuant to Board Policy. Although the Act was amended in 2002to exclude compensation for chronic pain, many injured workers continue to appear before theAppeal Tribunal with a chronic pain component forming the bases of their appeal. Not surprisingly,many of these claims, according to the injured workers, pre-date the new 1995 Act. In addition,while the new Act provides for a transition of claims authorized under the old Act (Section 50),many injured workers argue that their earlier work-related injury contributes to their current inabili-ty to work and therefore they feel entitled to compensation.

With the new Section 50, which provides for a re-assessment for wage loss when certain conditionshave been met, being quite clear; and, with chronic pain excluded as a compensable injury, theBoard, and ultimately the Internal Reconsideration Officer, in applying the July 1, 2002 amend-ments is unable to assess injured workers with a history of work related injuries and chronic painnotwithstanding that there may be objective evidence of it on file.

With the recent Supreme Court of Canada case Martin & Laseur decision providing for a worker tobe assessed for chronic pain, some change is anticipated in the way in which the Board deals withthe matter.

Because of the costs of legal services as expressed by many of the parties who appear before theAppeal Tribunal, most injured workers in particular usually present their own case notwithstandingthat they may have had counsel at the IRO hearing.

ALLEN J. MacPHEE, Q.C.Chair of the Appeal Tribunal

45

www.wcb.pe.ca2003 saw the Workers Compenation Board introduce its total-ly new & redesigned website, specifically aimed at being moreuser friendly and providing clients and visitors with a wealth ofinformation on Board policies and programs, including theAnnual Report for 2003.

WORKERS COMPENSATION BOARD OF PRINCE EDWARD ISLAND14 Weymouth Street, P.O. Box 757 Charlottetown, Prince Edward Island, C1A 7L7Telephone: 902-368-5680 Toll-Free in Atlantic Canada: 1-800-237-5049 Fax: 902-368-5705 • Web: www.wcb.pe.ca