Crown overpays corporations’ top managers, auditor says

Leclerc criticizes secrecy over salaries and high levels of severance settlements

QUEBEC Quebec is overpaying senior executives of Crown corporations and doling out generous performance bonuses and golden parachutes in the mistaken belief it has to compete with wages in the private sectors to retain their services, the province’s auditor general says.

Tabling her 2019-2020 report in the National Assembly Thursday, Guylaine Leclerc said her team had a look at the salaries of the vice-presidents of three school boards and eight crown corporations such as Investissement Québec, Loto-Québec and the Société des alcools du Québec (SAQ).

The off-the-scale salaries, bonuses and severance packages are mostly at the level of Crown corporations, but their explanation that such wages are required to compete with the private sector is “baffling” at best, Leclerc said in a hard-hitting report.

She said she was left with the impression that such corporations — when they were willing to share the information at all — see themselves as kingdoms unto themselves, offering wages as if they were corporations listed on the stock exchange and far removed from the oversight of government.

Leclerc said they neglect to recognize the one key difference between them and the private sector: they are monopolies and don’t have to worry about competition.

But why are profit-driven corporations such as the SAQ or Loto-Québec paying their vice-presidents almost twice the wages of vice-presidents of other crown corporations, such as the Musée national des beaux-arts du Québec? Leclerc asked.

Put another way, the vice-presidents of these corporations earn twice the wage of a government deputy minister for similar work.

She said their argument on the need to pay such incentive salaries to woo and retain workers doesn’t hold water. In three years, only one out of 13 crown corporation vice-presidents has moved on to the greener pastures of the private sector.

The auditor says while Quebec’s Treasury Board carefully polices the salaries of presidents of crown corporations, it looks the other way when it comes to vice-presidents, where norms are more or less non-existent.

Some even hand out generous signing bonuses of between $25,000 and $50,000 without ever having to explain why or even make the spending public.

The same goes for performance bonuses and severance allowances, which are handed out in secrecy and without “sufficient justification,” the auditor says in her report.

Even with Quebec’s auditors knocking on their doors, one crown corporation, Investissement Québec, has already refused to respect the auditor’s recommendation to be more transparent in its operations.

The SAQ agreed to apply one of four of the auditor’s recommendations, while Loto- Québec promised to implement all her suggestions.

The report concludes that in the last two years, while 11 senior executives at crown corporations shared a total of $3.5 million in severance allowances, 75 per cent of the total has never been revealed or explained.

At the Commission scolaire de Montréal, three severance packages (a total of $326,000) were doled out without ever having been made public.

The SAQ granted a departing employee 15 months’ salary for someone who had been working less than two years. Another Crown corporation, the Société des établissements de plein air du Québec, gave an employee five months’ salary for having worked 15 months.

The government standard is one month’s salary per year of service.

Salary increases are also handed out without a thought given to performance or productivity. Loto-Québec increased employee salaries between 2.5 per cent and 10 per cent without bothering to say why.

Overall, the process is veiled in secrecy with some corporations — which produce huge profits for the government treasury — digging in their heels and saying they can’t reveal the amounts because of confidentiality agreements.

“I can’t say there is a culture of secrecy,” Leclerc said at a news conference after tabling her report. “They just feel they are right.

“What I am saying is we need some kind of guidelines. I understand the government wants to leave Crown corporations a level of autonomy, but we need some guidelines to be sure there is no abuse.”

The report rapidly became news during daily question period, with the MNA for Rosemont, Vincent Marissal, asking Treasury Board President Christian Dubé what the Coalition Avenir Québec government plans to do about what is obviously an “open bar.”

Dubé quickly noted the report covers the period 2016-2018 when the Liberals were in power.

“I agree with him that what was happening is unacceptable,” Dubé told the house. pauthier@postmedia.com Twitter.com/philipauthier

I can’t say there is a culture of secrecy. What I am saying is we need some kind of guidelines. Guy LAINE LECLERC