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

UPDATE: Serious crash sends two to hospital, closes Cook Street in both directions

Police have taped off intersection as investigation continues

The ride of a lifetime

RCMP officer Rusty Olsen shares experience with Musical Ride

V2V ferry service to add daily trips from Vancouver to Victoria for fall

New routes will move home base to the mainland, allow guests more time in Victoria

Join the resistance for an outdoor movie screening in Colwood

Movies on the Hill returns to West Shore Parks and Recreation

Storm the fort in epic battle

Fort Rodd Hill’s annual water gun battle returns Aug. 18

A look at B.C. wildfire smoke from space

NASA provides a timelapse of smoke covering B.C. from space

Child dies in boating incident in Okanagan

A North Vancouver family was boating on Kalamalka Lake in Vernon when the incident occured

B.C. Wildfires 2018: Province calls for federal aid

More fires have burned in B.C. already this year than did in all of 2017

Kayak in Indian Arm waters off B.C.’s Deep Cove and feast on famous doughnuts

About a half hour drive from Vancouver, Deep Cove is a great kayaking spot for locals and tourists

Smokey skies across Vancouver Island expected to last until Wednesday

The province of B.C. has issued a special bulletin for all of Vancouver Island

Child, 4, attacked by cougar near Fernie

The BC Conservation Officer Service said it happened while the family was fishing

Trans Mountain pipeline protesters practise resisting police at Camp Cloud

Last week, a Supreme Court judge granted the City of Burnaby an injunction ordering protesters to remove everything from the site

Gun used in Fredericton killings is legal, man had licence

Police Chief Leanne Fitch said the long gun is commonly available for purchase, and is not a prohibited or restricted weapon

Ontario will sell pot online when legalization comes in the fall

There are further plans to have pot in private retail stores in early 2019

Most Read