B.C. Ferries' executives are paid too much and run a company without due accountability to the public. Those are some of the conclusions reached by B.C.'s comptroller general Cheryl Wenezenki-Yolland in her audit of B.C. Ferries.
The report, released Nov. 6, offers 20 recommendations for the province to consider when it comes to the B.C Ferries board, which runs the company, the B.C. Ferries Authority, which is the shareholder representing the government, and the B.C. Ferries Commission, which regulates ferries.
Wenezenki-Yolland wrote in her report that there is a fundamental problem with the way B.C. Ferries is governed by the board and authority, as the two are virtually the same thing. To remedy this, she recommends that authority members be independent from the board and that a new oversight body for B.C. Ferries and TransLink be established.
Her report also calls for an expanded scope for the commission to include the interest of people who pay to ride the ferries and that B.C. Ferries be subject to Freedom of Information legislation. Her report is highly critical of compensation for the executives, citing that Ferries' chief executive officer and president David Hahn took in over $1 million in salary and bonuses last year two to three times higher than executives at Crown corporations like ICBC or BC Hydro. Wenezenki-Yolland recommends that the pay structure be changed based on the board and authority meeting targeted achievements.
Not everything in the report is critical, though. Wenezenki-Yolland concluded B.C. Ferries is, overall, a well-run company.
"With the exception of compensation, we found [B.C. Ferries] operations to be well managed and reasonably effective," she wrote.
Jakob Knaus, representative for the Sunshine Coast Ferry Advisory Committee (FAC), welcomed the report and its recommendations.
In a statement, he said he agreed the company is well run, but the FAC still has many concerns. Chief among them is that the B.C. Ferries board and B.C. Ferries Authority must be separated and that compensation for executives is too high.
Knaus said it was good to see the report address the issue of fairness for ferry ratepayers.
"The report clearly identifies the need to safeguard the interests of ferry users. This was missing in the legislation defining the duties of the commissioner. Our urgent request has always been that ferry fare increases should not materially exceed the Vancouver consumer price index," he said.
Knaus said the FAC feels some threat that the report's call for a review service plan to help match services to demand may lead to service cuts on smaller routes.
But Hahn said the report is flawed, stating the company was set up as a private organization for a reason and Wenezenki-Yolland's recommendations are more fitted for public sector organizations.
"I think she does say it's reasonably well run. I would argue it's much more than that, but it's certainly a testament to the changes that took place here and what had to be done," Hahn said in an interview with Coast Reporter Nov. 9.
"I think everybody has to remember just how awful it was before with the ferry system her conclusions are based on her mind set, which is she is a public sector employee. I don't think anybody would be surprised to think for a moment that I'm not a public sector employee. I've never behaved like one. I've never had a job in that environment B.C. Ferries as a Crown corporation was an unmitigated failure."
"[The province] set up a process that said 'go operate independently and effectively with a private sector mindset' and if we hadn't, you'd still be sitting in the old rickety Queen of Surrey. We wouldn't have new ships. We wouldn't have the terminals going through big renovations."
As for taking action on the recommendations, Hahn said it is up to the provincial government, but they should be forewarned: more regulation and oversight means higher administrative costs.
"What concerns me is she does talk about layering on $3 to $5 million in increased administrative expense with bureaucracy," he said. "It should be very concerning to people because this will probably be passed on in the form of higher fares."
As for the level of pay, Hahn said he was "unceremoniously asked to leave the room" when the decision was made.
Shirley Bond, Minister of Transportation and Infrastructure, praised the report and said all the recommendations would be taken seriously by the government.
"The comptroller did a good job and certainly addressed some of the issues that caused us to request the review in the first place," she said. "Our plan now is to take the report and analyze each of the recommendations and the potential impacts and then make a decision about them."
Bond said over the next two months, she will consult with B.C. Ferries, TransLink and her government colleagues before starting to craft any amendments to current legislation.
Gary Coons, New Democrat deputy transportation critic, said the report validated what his party has been saying since the ferries were privatized in 2003.
"This report clearly spells out what the New Democrats have been saying all along. Costs have skyrocketed, but instead of protecting the public interest, the B.C. Liberals have sat by as their hand-picked ferries' board awards themselves pay raise after pay raise," he said in a statement.
Coons also criticized the government for the lack of accountability B.C. Ferries currently has to the public. Coons pledged that his party would pressure the Liberals on the issue of rising fares and decreasing service levels.
"The B.C. Liberals cannot continue to abandon coastal communities that depend on our ferries as the marine highway," he said.
