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.

 

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Sipili Molia, regional kettle manager, shows off the Salvation Army’s new contactless donation system for the 2020 Christmas Kettle Campaign outside municipal hall on Dec. 1. (Devon Bidal/News Staff)
VIDEO: Tech offers hope as Salvation Army sees need skyrocket across B.C.

Charity is equipping hundreds of kettles across B.C. with ‘touchless giving technology’

Kathy MacNeil, president and chief executive officer of Island Health, Dawn Thomas, acting deputy health minister and Island Health’s vice president, Indigenous health and diversity and Chief Don Tom of Tsartlip First Nation, stand out Saanich Peninsula Hospital Tuesday morning, when they also answered questions about a new report that “widespread systemic racism against Indigenous people” in the provincial health care system. (Island Health/Submitted)
Head of Island Health says Saanich Peninsula Hospital not part of racist guessing game

Tsartlip First Nations Chief Don Tom welcomes changes following report but promises future scrutiny

The Capital Regional District and the Habitat Acquisition Fund have agreed to partner on the purchase of the $3.4-million Mountain View Forest in Saanich to establish a new regional park. (Photo courtesy the Habitat Acquisition Trust)
CRD, Habitat Acquisition Trust to spend $3.4M on 20-hectare forest park in Saanich

Mountian Road Forest property to be conserved as regional park

Caroline Sousa, Bela Spick and her son Mateo marched along Prospect Lake Road in November 2019 to bring attention to the unsafe conditions on the road. (Black Press Media file photo)
Saanich reduces Prospect Lake Road speed limit to 30 km/h

New speed limit in effect as of Dec. 1 from Goward Road to Estelline Road

Royal Bay Secondary’s leadership class, comprised of Grade 9 through 12 students, is part of the student team organizing this year’s 10,000 Tonight event that shifts entirely online for 2020. (Aaron Guillen/News Staff)
West Shore student food drive shifts entirely online

Drive-thru option removed from 10,000 Tonight in light of COVID-19 restrictions

A tongue-in-cheek message about wearing a face mask to curb the spread of COVID-19 on a sign outside a church near Royal Columbia Hospital, in New Westminster, B.C., on Sunday, Nov. 29, 2020. THE CANADIAN PRESS/Darryl Dyck
B.C.’s COVID-19 infection count climbs back up to 656

20 more people in hospital, active cases still rising

Dave Wallace coached the Parksville Royals for 23 years. (PQB News file photo)
B.C. baseball community mourns death of legendary Vancouver Island coach Dave Wallace

‘All who knew Dave and his passion for the game will miss him greatly’

THE CANADIAN PRESS/Nathan Denette
B.C. researchers launch study to test kids, young adults for COVID-19 antibodies

Kids and youth can often be asymptomatic carriers of the novel coronavirus

A sign is seen this past summer outside the Yunesit’in Government office west of Williams Lake reminding visitors and members to stay safe amid the COVID-19 pandemic. (Rebecca Dyok photo)
B.C. First Nation leaders await privacy commissioner decision on COVID-19 information

Release of life-saving data cannot wait, says coalition of First Nations

MLA Jennifer Whiteside is B.C.’s new minister of education. She is speaking out against Chilliwack school trustee Barry Neufeld and asking him to resign. (Black Press)
New education minister calls on Chilliwack trustee to resign

Whiteside echoes former minister’s promise to look at options to remove Barry Neufeld

Peter Beckett. ~ File photo
Supreme Court of Canada to decide if it will hear appeal in 2010 wife murder trial

Peter Beckett has stood trial twice for murder in connection with the death of his wife, Laura Letts-Beckett

Tabor Home in Abbotsford. (Ben Lypka/Abbotsford News)
B.C.’s largest COVID-19 care-home outbreak records 19 deaths, 147 cases

Tabor Home in Abbotsford has been battling outbreak since Nov. 4

Most Read