Alberta vehicle industry watchdog ousts director following review
'This is a big step forward in restoring faith in the industry ensuring Albertans get what they pay for'
The watchdog organization for Alberta's car dealership industry is ousting its CEO.
John Bachinski will be replaced as CEO of the Alberta Motor Vehicle Industry Council (AMVIC), the agency responsible for regulating new and used car dealers in the province.
His removal from the organization followed an independent review of the agency commissioned by the province.
- Review of automotive business watchdog to be headed by George Cuff
- Alberta Motor Vehicle Industry Council sued for negligence
The author of the report, George Cuff, made 22 recommendations to change the structure of the organization and the board. Service Alberta Minister Stephanie McLean said she accepts all of them.
"When consumers and industry have an equal voice at AMVIC's decision-making table, it will improve outcomes for all Albertans," she said.
Cuff recommends changing the structure of the board, which was tilted in favour of industry, to have equal representation from the public.
The chair of the board should be appointed by the minister after a search, Cuff found.
Under the current structure, the CEO oversees investigations of consumer complaints and then rules on them. Cuff recommends the government create the position of registrar to take care of enforcing regulations, leaving the CEO with the responsibility of administering the organization.
"This can ensure there can be no interference with investigations when actions under the Fair Trading Act are being considered," McLean said.
A draft internal review from Service Alberta leaked to CBC News last year said Bachiniski was directly or indirectly involving himself in "investigations, inspections or licensing."
Cuff also wants responsibility for approving claims under the compensation fund to be transferred to an independent board of trustees, with equal representation from the public and industry.
The review found that the fund, created in 2012, had reached its $4-million limit. Yet very few claims had been paid to consumers, with only one, totaling $2,000, granted last year.
"This is not acceptable and it needs to change," McLean said.
AMVIC under fire after fraud case
AMVIC licenses and regulates auto dealers and repair shops, and investigates consumer complaints. It's supposed to serve as a self-regulating watchdog over industry on behalf of the public, operating at arm's length from the government. It operates under the purview of Service Alberta, which appoints a board to oversee it.
McLean appointed Cuff, former mayor of Spruce Grove, in August 2016 to review the operations and governance of AMVIC. The investigation was intended to strengthen public confidence in the regulatory board.
The body came under fire in 2015 after the owner of Treadz Auto, a now defunct vehicle consignment company, was arrested in connection with an alleged $1.8-million forgery, theft and fraud ring.
The industry council was named, along with TreadzAuto, in a $5-million class action lawsuit. Vehicle owners say the automotive watchdog failed to investigate their concerns after the consignment company didn't honour their contracts.
- TreadzAuto sued in $5M class action along with AMVIC
- TreadzAuto owner accused of vehicle consignment fraud
In 2015, the provincial government amended the Fair Trading Act to give Service Alberta enhanced powers over some regulatory organizations, including AMVIC.
The amendments gave the minister the power to order a review of AMVIC's governance and operations.
The review found the board relied too much on the CEO for advice and direction and wasn't as involved in governance and management as it should be. Cuff heard the board wants to change and "get a better handle on things."
The review also found staff were unhappy with senior management within AMVIC. Cuff notes in his report that staff came to him "without prompting" during the interview process and followed up by phone and email afterwards.
The organization has also had high staff turnover, with 42 of the current 48 employees hired in the last four years. The five senior managers have been with AMVIC less than five years.
Cuff concluded the administration of AMVIC needs to improve, with an emphasis on team work and collegiality.
"Senior management still has some distance to do in order to become a quality leadership team," Cuff wrote.
"While we respect the fact that senior managers prefer to hold onto their roles and guard them jealously, the good of the system requires enhanced, ongoing communication including shared problems and solutions."
The report recommends the role of the CEO be changed and that the board "take the necessary steps to restore confidence in the administrative leadership and direction which are central to the transformational changes we have recommended."
Bachinski was removed from his position after the results of the review were shared with the board on Dec. 5. An interim CEO has yet to be named.