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Our clients fund ESAO.

During 1998 and 1999, virtually all of our funding came through the Workplace Safety and Insurance Board (WSIB). Increasingly, a small portion of our income is due to sales of products and services to non-education sector clients, as well as recoveries of some costs charged to our clients. In the years to come, revenue from sales of products to non-clients is expected to increase.

Our funding flows through the WSIB. Schedule 1 and Schedule 2 firms calculate their payments to the WSIB in different manners. Below is a calculation that gives a general idea of the source of our funds. This is based on data received from the WSIB for 1999 and is presented as an example. The data for more current years does not differ significantly.

Schedule 1 Firms

Schedule 1 firms pay premiums, based on the assessable portion of their payroll, according to a rate established for their rate group. A portion of that rate is calculated to reflect the value of prevention activities carried out by the Safe Workplace Association for that client.

Clients of ESAO belong to three different rate groups. Shown below are the Rate Groups, the rates, and the funds potentially available for ESAO. Also shown are the total insurable earnings for that rate group and the resulting transfer. This data was provided by the WSIB, based on actual insurable earnings in 1999.

Rate Group	Rate  ($)	Transfer Rate ($)	Actual Insurable  Earnings ($)	Transfer ($)
810	0.64	0.063	744,841,550	469,250
812	0.36	0.047	526,665,658	247,533
817	0.46	0.053	2,249,122,227	1,192,035
Total			3,520,629,435	1,908,818

Schedule 2 Firms

Schedule 2 firms pay an overhead charge, based on the actual costs of accidents in their workplaces. A portion of this overhead charge is earmarked for prevention activities, and goes toward the Safe Workplace Association to which the firm has been assigned. ESAO has more than 120 firms in Schedule 2, the majority being school boards and colleges. The amount of the overhead charge has changed since 1999 and continues to be the subject of discussion among Schedule 2 clients. However, in 1999, the data was as follows.

Benefit costs subject to Admin. fees in 1999	$17,262,575.00
Amount of overhead going to "prevention" was set at a uniform rate for all Safe Workplace Associations for 1999 - $2.37 per $ 100.00 of administration fee.	409,123.00
Amount of transfer to ESAO from Schedule 2 firms	$ 409,123.00

Total Funding through WSIB

Thus, the total amount of funding "available" to ESAO based on the premiums paid to WSIB by our Schedule 1 and Schedule 2 clients was:

Schedule 1	$ 1,908,818	82.3%
Schedule 2	409,123	17.7%
Total	$ 2,317,941	100%

This amount represents an approximation of the ESAO "account" that would be created within the WSIB for ESAO funding. Due to the fact that Schedule 1 firms pay in advance (on payroll estimates), while Schedule 2 pays after the fact (surcharge on actual accidents), the calculation can only be used as a guide.

For purposes of comparison, the actual total benefit costs for both Schedule 1 and Schedule 2 firms for 1999 were:

Schedule 1	$ 6,295,770	26.7%
Schedule 2	17,262,575	73.3%
Total	$ 23,558,345	100%

Relationship to ESAO Budget

The budgeting process, in which all Safe Workplace Associations participate, consists of developing a budget, obtaining the proper approvals according to the governance requirements of each Association, and submitting the budget for approval by the WSIB. Not all funding requests made to the WSIB are approved. The budget amounts approved for ESAO over the first six years of operation are shown below.
 

Note that the 2003 Operating budget has been increased to include the employers contribution to the pension plan, which had been removed from all Safe Workplace Association budget allocations by the WSIB when the contribution holiday was initiated. The contribution holiday is now over.

Funding Received by ESAO from WSIB (1998 - 2002)
	1998	1999	2000	2001	2002
Operating	$2,030,898	$2,111,800	$2,115,914	$2,139,973	$2,161.373
Capital/Startup	339,102	0	0	0	0
Total	$2,370,000	$2,111,800	$2,115,914	$2,139,973	$2,161,373

Funding Received by ESAO from WSIB (2003 - 2006)
	2003	2004	2005	2006	2007	2008
Operating	$2,332,902	$2,317,962	$2,317,962	$2,317,962	$2,317,962	$2,317,962
Capital/Startup	0	0	0	0	0	0
Total	$2,332,902	$2,317,962	$2,317,962	$2,317,962	$2,317,962	$2,317,962

Last Revised: 07/29/08