Province blasted for dipping into cash- strapped Crown agencies
Profits should be redirected to taxpayers through lower rates or reimbursements, not go to provincial government, critics say
The B. C. government is siphoning billions of dollars from BC Hydro and the Insurance Corp. of B. C. at the same time as the cash- strapped Crown corporations are raising rates for customers.
ICBC is set to give almost $ 1.2 billion in “excess optional capital” to the provincial government between 2010 and 2014, according to its service plan released with the provincial budget.
The insurance corporation hiked basic rates this month by 11.2 per cent — an average hit of $ 27 per driver — because it said income was down in the face of increased bodily injury claims and lagging investments.
The government is claiming $ 942 million from BC Hydro between 2009 and 2014.
Yet BC Hydro will boost rates by 7.07 per cent in April — adding $ 5 a month to an average power bill. The hike is supposed to help pay for billions in Hydro debt, which was pushed off into future years using what’s called deferral accounts.
Ordinary British Columbians are being punished with higher fees so the government can reap an annual profit from the utilities, said Jordan Bateman, B. C. director of the Canadian Taxpayers Federation.
“Really what should be happening is any profit in that corporation should be returned to the ratepayers through lower rates or reimbursement — instead it goes to government,” he said.
“As long as they have these piggy banks they are going to keep breaking them and stealing the money from them. The problem is, ratepayers are beginning to feel very uncomfortable.”
The government defended the practice and said it only takes what is affordable from Crown corporations.
The ICBC money is excess capital funds from the optional insurance side of its business, and it isn’t allowed by law to cross- subsidize its basic and optional insurance operations, said the Finance Ministry.
In the case of Hydro, Energy Minister Rich Coleman said the “government has an anticipation of some revenues” from the power corporation.
“It’s a Crown corporation [ that] we expect obviously to give some revenues back to government,” he said. “Otherwise it doesn’t help us pay the bills on things like health care and education.”
NDP critic Shane Simpson said he expects taxpayers to start questioning why they are paying higher rates when government takes money from Crown corporations.
He said an NDP government would end Hydro’s “shady” use of deferral accounts, which B. C.’ s auditor- general recently said help Hydro push off expenses into future years and create the appearance of annual profits where none exist.
Crown corporations should continue to deliver fair dividends to the provincial treasury where possible, said Simpson.
“That’s not a bad thing, a fair dividend,” he said. “The question is, just how are you paying for that and how deeply are you reaching into people’s pockets to get that dividend?”