Figured this warrants its own thread as we have previous time-based Coastal Ferry Act discussion.
The Coastal Ferry Act effectively governs BC Ferries as a private company, and its relationship with government. There are some significant changes ahead captured in some pretty small-appearing changes to the Act.
Bottom-Line-Up-Front: BC Ferries Authority (the government) can now directly task the Ferry Service Board (the company) to action any tasks or direction. Effectively this makes BC Ferries public again, with a few caveats. Executive pay will be publicly regulated, which will likely bring it down a bit. The company is still private, and debt still not held by the Province. At the time I am posting this, changes have not been made but were introduced as Legislation last week.
Here's the changes:
BILL 7 – 2022
COASTAL FERRY AMENDMENT ACT, 2022
HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of British Columbia, enacts as follows:
1 Section 1 of the Coastal Ferry Act, S.B.C. 2003, c. 14, is amended by adding the following definition:
"Public Sector Employers' Council" means the Public Sector Employers' Council continued under section 3 of the Public Sector Employers Act;
2 Section 7 (4) is repealed.
3 Section 18 (5) is amended by striking out "and" at the end of paragraph (d), by adding ", and" at the end of paragraph (e) and by adding the following paragraph:
4 Section 21.01 (2) is repealed and the following substituted:
(2) BCFS must provide to the Authority, within the time period specified by the Authority, any information the Authority considers necessary to support the Authority in carrying out its purposes under this Act.
(f) any resolutions passed by the directors of the Authority in that fiscal year.
5 The following section is added:
Resolutions in relation to public interest
21.02 (1) The Authority may, by resolution of its directors, and in support of the public interest, including the public's interest in safe, reliable and affordable coastal ferry services in British Columbia,
(a) establish matters the Authority considers important, and
(b) issue binding directions to BCFS.
(2) Promptly after the passing of a resolution under subsection (1), the Authority must
(a) notify BCFS and the commissioner of the resolution, and
(b) post the resolution on the Authority's publicly accessible website.
(3) After receiving notification under subsection (2), BCFS must
(a) comply with any direction issued under subsection (1) (b),
(b) if applicable, ensure its strategic and business plans take the resolution into account, and
(c) ensure its annual report for the year in which the resolution is passed describes the actions BCFS took in response to the resolution.
6 Section 21.1 is amended by adding the following subsection:
(4) A director of the board of BCFS is removed as, and ceases to be, a director of the board of BCFS on the passing of a resolution to that effect by the directors of the Authority.
7 Section 21.2 is amended by adding the following subsection:
(2.1) Prior to establishing or amending a BCFS directors' compensation plan under subsection (1), the Authority must consult with the Public Sector Employers' Council.
Remuneration of executives
21.4 (1) Subject to subsection (2), the Authority may establish or amend a BCFS executive compensation plan.
(2) A BCFS executive compensation plan must
(a) establish the methodology by which remuneration for the executives of BCFS is to be determined, which methodology must result in remuneration for each executive of BCFS that
(i) is, subject to subparagraph (ii), consistent with the remuneration that organizations in Canada that are of a similar size and scope to BCFS provide to persons who perform services or hold positions that are similar to those performed or held by that executive, and
(ii) is not greater than the remuneration that provincial public sector organizations in British Columbia provide to persons who perform services or hold positions that are similar to those performed or held by that executive, and
(b) identify the organizations that are being used as the comparisons for the purposes of paragraph (a).
(3) Prior to establishing or amending a BCFS executive compensation plan under subsection (1), the Authority must consult with the Public Sector Employers' Council.
(4) Promptly after the Authority has established or amended a BCFS executive compensation plan, the Authority must take all necessary actions to amend the articles of BCFS to
(a) adopt the BCFS executive compensation plan as established or amended,
(b) ensure that the articles require that the remuneration of all executives of BCFS be set and provided in accordance with the BCFS executive compensation plan,
(c) set out the remuneration that may be paid under that plan or amended plan, and
(d) ensure that the articles require BCFS to publish, in each fiscal year, details of the remuneration provided to its executives in the previous fiscal year.
(5) The Authority must not amend a provision in the articles of BCFS that relates to remuneration of the executives of BCFS or the terms on which it is to be paid unless that amendment is made in accordance with subsection (4).
(6) Promptly after the Authority has established or amended a BCFS executive compensation plan, the Authority must publish the plan or amended plan on its publicly accessible website.
9 Section 25 (1) is repealed.
0 Section 38 is amended by adding the following subsection:
(2.1) For the purposes of subsection (1), the commissioner must take into account any resolution passed by the directors of the Authority.
11 Section 71 is repealed and the following substituted:
This Act prevails
71 (1) In the event of a conflict between this Act and any other enactment, this Act prevails.
(2) For certainty, subsection (1) applies to the Business Corporations Act and the Labour Relations Code.
Commencement
12 This Act comes into force on the date of Royal Assent.
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Explanatory Times Colonist article:
www.timescolonist.com/opinion/les-leyne-bc-ferries-is-being-yanked-back-to-government-control-5116256?fbclid=IwAR2P3f8HAx_6bBp8ACwK88Qs6XSh7USO_u_9o7x2xMf5ZkJYV4Mz_PC7eK0Les Leyne: B.C. Ferries is being yanked back to government control
Most of the power will be stripped from the company’s board of directors and handed to a little-noticed oversight board, the B.C. Ferry Authority.
The language in a new bill that will govern B.C. Ferries is mostly the neutral legalese typical of all legislation.
But decoded into plain English (with a dose of translator’s discretion), it reads as a remarkably blunt power play aimed at jerking the quasi-independent corporation back under something close to direct government control.
The NDP government has stopped itself from just declaring the outfit a Crown corporation, which would be their first preference, if it wasn’t so expensive. Instead, it’s redesigned the lines of authority, based on a simmering mistrust of the corporation that persisted even after the NDP replaced some appointees of the previous government.
Most of the power will be stripped from the company’s board of directors and handed to a little-noticed oversight board, the B.C. Ferry Authority.
Politicians have been tinkering with the governance structure ever since the B.C. Liberals divested B.C. Ferries from government and set it up as publicly owned but privately managed corporation, “free from political interference.”
The change was driven by the lesson of the fast ferries fiasco, where NDP politicians of the 1990s made the call to spend hundreds of millions of dollars on three aluminum catamarans that were going to revolutionize the service. They didn’t work and had to be abandoned (by the NDP government itself, it should be noted.)
The curious, confusing new structure held for a few years, but even the Liberals couldn’t resist meddling again when B.C. Ferries became controversial. The first-term NDP continued the tinkering by ordering fare freezes and service levels to meet popular demand. But the new bill goes far beyond that. The few brief sections neutralize the B.C. Ferries board of directors and give the final say on virtually everything to the one-step-removed B.C. Ferry Authority board.
Some of the changes are arcane, but send a clear message.
For example, current law says the corporation must provide to the authority any information it decides it needs. The new law adds “within the time period specified by the authority.”
In other words: “Give us whatever we want. And do it stat.”
The current law describes the B.C. Ferry Authority as the sole voting shareholder of the ferries corporation “and is to oversee the strategic direction in support of the public interest, including the public’s interest in safe, reliable and affordable coastal ferry services in British Columbia.”
Broad-brush, big picture oversight, in other words.
The new bill adds a few dramatic details. The authority board of directors will be able to pass resolutions that declare any aspect of the ferry service a public interest, then issue binding directions to B.C. Ferries (which is also known as B.C. Ferry Services or BCFS).
Just to be clear, “BCFS must comply with any direction issued … ensure its business plan takes the resolution into account and ensure its annual report … describes the actions BCFS took.”
To paraphrase the new instructions to B.C. Ferries: “When the authority says ‘jump,’ you not only jump, you report the jump publicly.”
Another example of the war games being played in this little governance adjustment: The bill states “a director of the BCFS is removed as, and ceases to be, a director on the passing of a resolution to that effect by the authority.”
In plain English, the authority can fire B.C. Ferries directors at will.
One clause in the bill zeroes in on the touchy topic of executive compensation. The current law gives the authority a detailed mandate to govern B.C. Ferries executive compensation, which tops out at more than a half-million dollars for veteran CEO Mark Collins. The new bill adds a requirement that the executive compensation plan be referred to the Public Sector Employers’ Council, an agency that coordinates compensation plans across the entire public sector.
It’s another level of regulation and scrutiny on how much the top earners at B.C. Ferries make, at a time when experienced marine executives are in short supply.
Subject to a full explanation, the first question about the new arrangement is: What’s the point of having two boards, when one will have all the power?
Taxpayers will wind up getting one real board for the price of two. And they don’t come cheap. The 11-member B.C. Ferries board and nine-member B.C. Ferry Authority board earn healthy stipends. It was weird before. It’s even weirder now.
Transportation Minister Rob Fleming’s bland introduction said it “will provide the tools for the B.C. Ferry Authority to best represent the public interest.”
There’s a lot more to it than that.
lleyne@timescolonist.com
