British Columbia

Major BC Ferries and TransLink reforms needed: report

The top levels of both BC Ferries and TransLink require a major restructuring to give them more accountability, greater transparency and better oversight, according a new report by B.C.'s comptroller general.
TransLink operates the Vancouver area's public transit system. ((Mike Laanela/CBC))
The top levels of both BC Ferries and TransLink require a major restructuring to give them more accountability, greater transparency and better oversight, B.C.'s comptroller general says.

In her report released Friday morning, Comptroller General Cheryl Wenezenki-Yolland targeted the governing structure of both organizations and found both badly in need of reforms, but for different reasons.

Wenezenki-Yolland said the structure of TransLink, the regional transit authority for Metro Vancouver, was plagued by uncertainty and conflicting interests, because of the unclear role of the regional Mayors' Council, leading to significant operational issues.

In theory the Mayors' Council was set up only a year and half ago to provide long-term direction for TransLink, but the comptroller found it failed to provide effective leadership.

"Inaction by TransLink and the Mayors' Council to maintain a balance between expenses and revenues has brought TransLink to a point at which substantial operating deficits in 2010 and beyond will be difficult to avoid," wrote Wenezenki-Yolland.

The report recommended provincial government representatives be added to the regional Mayors' Council and that group be renamed the Transit Authority, with a stronger mandate to oversee the operational board of TransLink.

BC Ferries lacks public accountability

In the report, Wenezenki-Yolland was also critical of upper echelons of BC Ferries Corporation, and its only shareholder, the BC Ferries Authority. 

The report said the BC Ferry Authority board was ineffective in overseeing the company and protecting the public interest, because the boards of both organizations were virtually the same, creating an inherent conflict of interest.

To strengthen the oversight of BC Ferries, the BC Ferry Authority must be more independent of the BC Ferries board, said the comptroller.

Wenezenki-Yolland also criticized the retainers that the BC Ferries directors paid themselves, noting they were three to five times higher than comparable levels at Crown corporations.

BC Ferries' Coastal Renaissance arrives in Departure Bay, Nanaimo. ((CBC))

"Our concerns regarding BC [Ferries] compensation are compounded by the fact the BC [Ferries] board sets its own compensation and approves the executive compensation without accountability to the independent [BC Ferries] Authority," she wrote.

She also found the executives at BC Ferries were paid significantly more than comparable large public sector organizations.

CEO David Hahn's compensation — at $1 million — was more than double his peers in the public sector, and that performance targets for incentive bonuses for executives were "easier to attain that we would have expected."

Despite the criticisms of the structure and generous compensation, overall the comptroller general found BC Ferries was a "well managed and reasonably effective operation."

Single commission recommended

Wenezenki-Yolland also found the BC Ferry Commission — a third organization which regulates BC Ferries fares and routes — was too narrowly focused on ensuring the coastal ferry system was financially sustainable

She recommended the commission be given a broader mandate to focus more on the needs of customers and communities.

Likewise, she found the Regional Transportation Commission should also be given a stronger mandate to make it more effective at regulating TransLink operations.

She then recommended both organizations be scrapped and replaced with a single Transportation Commission, much like the BC Utilities Commission, to create a more effective and independent regulatory organization.

Wenezenki-Yolland wrote the report after Transportation Minister Shirley Bond and Finance Minster Colin Hansen originally asked her in August to conduct a review of the operations of the two provincial bodies.

The report was released the day after the former president of TransLink, Tom Prendergast, resigned to take up a position heading the New York City Transit Authority.