The B.C. Government’s Publicly Owned Elephants In The Room

Photograph: B.C. Ferries handout, via Vancouver Sun

The provincial government is drowning in debt, and some of the biggest losses are coming from their publicly owned transportation companies, Translink and B.C. Ferries. According to B.C.’s comptroller Cheryl Wenezenki-Yolland in her audit of B.C. Ferries, executives are paid far too much and run the company without any public consultation or accountability.

In the report that was released last week, it offers recommendations to the province to reign in B.C. Ferries. She also advised that the government create a new oversight body for B.C. Ferries and TransLink in order to facilitate better public consultation.

B.C. Ferries’ C.E.O. and President David Hahn received $1 million in salary and bonuses in 2008, which is much higher than executives at other crown corporations. But Mr.Hahn rejected the reports recommendations, saying that B.C. Ferries is a private organization, not a public sector one. But that’s not entirely accurate.

It’s true that B.C. Ferries is organized as a privately held company, but operates with the provincial Crown as sole shareholder. Mr.Hahn has warned that any regulation to the company would mean even higher administrative costs.

But Maureen Bader of the Canadian Taxpayers Federation says that “B.C. Ferries is still a government monopoly and still gets millions of taxpayer’s dollars every year to operate, but appears to be accountable to no one.” She agrees that the last thing we need is more bureaucratic oversight to add to the current problems with the system, but says that executive pay should be comparable to other public sector companies, and not private ones as it currently is:

So what requires much more scrutiny is just how the salary was arrived at. The behaviour of the members of the Ferry Authority needs a more thorough investigation. The Ferry Authority acts as the sole shareholder of BC Ferries and is supposed to appoint the Board members and set Board and executive salaries. What did the Authority do? It appointed itself to the Board then gave itself and the Ferries executives big pay increases. It took a Comptroller General’s report to reveal this because it would appear that politicians are not minding the store.

The fact is that B.C. Ferries may want to pretend it’s a private company with the ability to set it’s own exorbitant executive pay, but it’s a government-controlled monopoly in the transportation network.

And then there’s TransLink, and the new money-losing Canada Line that links Richmond, and hence the Olympic Games, with Vancouver. The Vancouver Province reported on Thursday that the Canada Line will lose $14-million to $20-million every year until 2025 under the current fare structure and expected attendance rates. The worst part of this is that the Canada Line seems to have been built exclusively for the Olympics, since the Evergreen line is by far the greater priority.

The Canada Line, which caused chaos on Cambie street’s commercial district, wasn’t really deemed a necessary priority for Lower Mainland residents. The far greater importance was getting the Evergreen skytrain line out to the suburbs of Port Moody, Port Coquitlam and Coquitlam, which still rely only on the West Coast Express in order to make expensive trips in to Vancouver every day. People who have been forced out of Vancouver by skyrocketing housing prices now have to rely on a gridlocked highway, or an expensive bus service in order to get to work.

Ms.Wenezenki-Yolland found that fares from transit riders make up just half of what the transit actually costs to run, which will only get worse with the Olympic Canada Line. Another problem is that TransLink continues to expand without calculating ridership demand.

And just like B.C. Ferries, TransLink is crushed under the weight of it’s corporate executives. Administrative costs for the crown corporation rose 101% from 2002 to 2008, or 7 times greater than the inflation rate, as Michael Smyth writes in the Province. That means a structural deficit of $130 million a year, assisted in large part by the Canada Line and the executive payouts.

As the Liberals struggle to balance their massive budget deficit in the coming years, their public transportation corporations will need to be scrutinized as one of greatest areas to make cost-effective cuts. Unfortunately for Gordon Campbell, his carbon tax and other ridiculous environment regulations like AirCare, will make returning to the car a paradoxical solution.