ICBC executives make drunken sailors blush

Former B.C. premier W.A.C. Bennett once had a cabinet minister tell him he would treat taxpayers’ money as if it were his own.

Former B.C. premier W.A.C. Bennett once had a cabinet minister tell him he would treat taxpayers’ money as if it were his own.

“Oh, no, you won’t,” Bennett said, “not as long as I’m premier. That money is tax money, it’s trust money, and I want 110 cents worth of value out of every dollar.”

That’s a philosophy the overpaid executives at the Insurance Corporation of B.C. have clearly failed to embrace. That shouldn’t be a surprise – government monopolies are notoriously inefficient and expensive.

The B.C. government’s long-awaited review of ICBC was like a horror movie for taxpayers, starring an age-old government problem: the bloated payroll.

Despite the fact the number of frontline union employees shrank slightly from 2007 to 2011, the number of managers at ICBC jumped 32 per cent – 272 new manager jobs. These managers were some of the highest paid individuals in the public sector; senior management compensation has spiked 70 per cent since 2007, from $12.3 million to $20.9 million.

Five years ago, 14 ICBC employees made more than $200,000. Last year, 54 broke that threshold and the bank.

ICBC says it has frozen management pay in response to the review. That’s not good enough; an immediate 15 per cent, across-the-board wage rollback should occur.

If managers balk at the cut, they should be firmly reminded that ICBC has been ordered to cut 135 management positions by June 2014, and those refusing rollbacks could be first on that list.

This bloating at ICBC all occurred during one of the worst recessions in history and, along with declining investment revenue and increased claim payouts, led to ICBC raising its basic insurance rates by 11.2 per cent this year.

The report says ICBC’s “culture of cost-containment and financial discipline has been lacking in recent years.” Sound familiar? ICBC’s problems are eerily similar to B.C. Hydro’s, where a review last August revealed a “gold standard” corporate culture, 99 per cent of employees cashing in on bonuses and rising debt.

The review revealed that ICBC uses the Canada Mortgage and Housing Corporation, the federal government and the Alberta government to set their pay grades. Inexplicably, they don’t use the B.C. government or private insurance companies.

This is another good reason for a Compensation Equity Act, which would force government to take tough negotiating stands with all public workers and bring their salaries and benefits back in line with those earned in the private sector.

The B.C. Liberal government’s philosophy of letting these Crown corporations operate as monopolies has proven unsuccessful. In lieu of real market forces and competition, the boards exert no fiscal control over senior staff, who inevitably inflate salaries, benefits and staffing levels. With no accountability or competition, ratepayers suffer the consequences of higher costs and reduced revenue to government.

Government monopolies like ICBC need to be constantly monitored by politicians. Better yet, get taxpayers out of the insurance business all together.

Studies have consistently shown that drivers in provinces with strongly regulated, but competitive, auto insurance markets pay less for their insurance than we do in B.C. ICBC reduced its optional insurance rate – the only part of its business it has to compete for – this year by six per cent.

One thing is certain: a lot of work has to be done at ICBC before taxpayers can trust we’re getting 110 cents worth of value out of every dollar we pay them.

Jordan Bateman is the B.C director for the Canadian Taxpayers Federation.

 

Just Posted

Greater Victoria residents among the most credit-worthy Canadians

Yet debt levels continue to rise as Canadians owe $178 for every $100 earned

BC Transit offers high school grads free bus rides

2019 grads can choose two days in June to ride for free

Village Block Party returns to Cook Street

Sunday’s event brings vendors, entertainment and coveted dog race to Victoria’s Cook Street

Thursday sees mix of sun and cloud, high of 22 C

Plus a look ahead at your weekend forecast

BC business offers ‘clean start’ for people with employment barriers

CleanStart BC is looks to expand its Victoria staff

Kelowna toddler suffers cracked skull after fall from balcony

Neighbour who found the two-year-old boy said he has a bump the size of a golf ball on his head

POLL: Were you satisfied with the Game of Thrones series finale?

Millions gathered in front of their televisions Sunday night to watch the… Continue reading

Greater Victoria wanted list for the week of May 21

Greater Victoria Crime Stoppers is seeking the public’s help in locating the… Continue reading

Crews fight fire with fire to keep blaze from northern Alberta town

The wildfire now covers some 920 square kilometres

Man in B.C. charged with murder and arson in 2016 New Brunswick death

He is charged in the death of 71-year-old Lucille Maltais, who was found inside a burned down home

Improve your life and theirs, adopt a cat from the BC SPCA

The BC SPCA holds an adult cat adoption promotion

RCMP probe if teen was intentionally hit with ski pole by mystery skier on B.C. mountain

The incident happened on March 20 on Grouse Mountain. Police are urging witnesses to come forward

Support growing for orphaned Okanagan child after father dies in highway crash

Family thanks emergency crews for assistance in traumatic incident

Baby boom seniors putting pressure on B.C. long-term care: report

B.C. leads Canada in growth of dementia, dependence on care

Most Read