Yesterday, I was in Kelowna to present the CTF’s 2014-15 B.C. Budget recommendations to the Select Standing Committee on Finance and Government Services. Here is a transcript of that presentation and Q&A.

D. Ashton (Chair): Caroline, David, thank you very much for coming this morning.

Next up we have the Canadian Taxpayers Federation.

Jordan, welcome. Nice to see you again.

J. Bateman: Nice to see you. I almost called you Your Worship. Mr. Chairman — pardon me.

D. Ashton (Chair): Oh jeez. Mr. Chair will be fine. Actually, Dan is really good. I appreciate that part of it.

J. Bateman: Old habits die hard. I'm sure Marvin's accidentally done that once or twice as well.

D. Ashton (Chair): Like I said, it's difficult when you're on the road as it is, and I have to say that this group of individuals works really well together. That's always good to see.

J. Bateman: That's something I wanted to comment on, actually. Sitting upstairs watching CNN before I came down here and seeing how you've got two parties there who can't even stand to be in the same room together to talk about important issues, but all of you here…. Having tracked the progress of this committee over the years now and seeing recommendations that have come here from submissions into your report and then actually into the budget, I think it's a positive sign that we're not American.

We definitely don't envy your task as a committee. I've been following the submissions that have been made — amazing organizations speaking, asking for help, trying to education elected officials on what they do and what would make their lives easier.

Whenever we're at an event like this, we think back to a 2006 encounter in the federal House of Commons with the federal counterpart to this committee where our then director John Williamson came in and made a presentation. He left, and an MP followed him out and said: "I just want to be clear. You're not asking us for any money?" John said: "No. No, we're asking you to spend less money, in fact." This MP actually said: "I've been tracking all the requests that our committee…. We've had $600 billion of requests." At the time the budget was about $220 billion. "You're the first person to come and ask us not to spend more. I appreciate that."

So we're here to ask you not to spend more money, if that's all right.

M. Hunt: And we appreciate that.

J. Bateman: Oh, good.

Our top priority this year remains the balanced budget. I mean, obviously, the Finance Minister has been unwavering in that, and we certainly appreciate it. We think it puts B.C. in an economically competitive position compared to other provinces. It's amazing to see what's happened in Alberta, where they've gone downhill so quickly as far as controlling their government spending. Who would have thought Alberta would be running deficits and have eaten up all of their heritage fund? But there they are. So our top priority remains that balanced budget.

Our recommendations are on page 5. This year we focused on the Crown corporations. Obviously, cost of living is a major concern to everyone in B.C. and certainly to our MLAs. One of the factors in cost of living are all the Crown corporations — the fees, the rates, all of the things we pay in order to fund those services. We wanted to focus in on the Crown corporations this year and see if there are ways to try to bring some of those rates down, ways to maybe slowly transform the way government interacts with Crown corporations. We're well aware that nothing will be solved overnight. But there are certain things.

If I can highlight recommendation 5, which is for ICBC. The interesting thing about ICBC in the next three years is that government actually is budgeting for less dividends from ICBC than in previous years. This year it's about a quarter-billion dollars, $257 million, but next year the budget calls for only $222 million from ICBC and $205 million the year after, so it's trending downwards.

Our advice is that this an opportunity to see if we can trend it all the way to zero over a period of eight to ten years. If you just follow that percentage drop from this year to next, you could actually get there — to zero — in eight years. That money then could be put back into keeping lower rates for drivers, which I would certainly appreciate. My minivan is up for renewal any day now.

We're always looking for ways to try and save money. It's rare to see a Crown dividend dropping in the budget, so we think that's something that might be doable over the mid-term — eight to ten years.

We have a lot of information here regarding B.C. Hydro, the 2011 audit that was done. I know B.C. Hydro hasn't released their 2013 numbers yet. Mike Smyth's pieces have been focusing on last year's numbers. We're very keenly interested in what B.C. Hydro will roll out for their 2013 numbers to see if progress has been made on that audit. If it hasn't, I think that's a significant challenge that government will need deal with.

Then finally, the other one I want to highlight now…. You'll notice I've made a typographical error here. Recommendation 15 is: kill the Pacific Carbon Trust. Recommendation 11 is: eliminate the Pacific Carbon Trust. Number 15 should be: kill the carbon tax. However, if you want the kill the Pacific Carbon Trust twice, I won't argue with you. I find this to be one of the most puzzling of all government programs.

To give you an idea of just how puzzling it is, the Canadian Taxpayers Federation does not often find ourselves in agreement with the Canadian Centre for Policy Alternatives and with Mark Jaccard. But on this one, we're in pretty much lockstep — that the Carbon Trust has not accomplished the goals that were set out for it. The Auditor General's report last year further called that into question, along with some reporting by the Vancouver Sun and some investigation by former MLA Bob Simpson.

The Pacific Carbon Trust — I mean, that's a way to put money immediately back into classrooms, into hospital rooms in this province. The Surrey school district — about $600,000 a year they spend on carbon credits. Even if you just let them go into the free market and buy cheaper carbon credits, they would save a considerable amount of money, let alone if you actually eliminated the program altogether.

Those are our major recommendations. I just wanted to say thank you again for this opportunity. If there are any questions, I'm happy to answer them.

D. Ashton (Chair): Thank you for the presentation.

Any questions or comments?

M. Hunt: Well, you can't get away with giving us this much information and having no questions, right? Let's start on your recommendation number 4, because I'm new at the job, so I'm not understanding some of the research that you've done. Please tell me: what's Hydro doing?

J. Bateman: Well, the B.C. Utilities Commission — it's a weird quirk of the system where, if you bring an application to the BCUC, you actually have to fund opposition research into your application. So B.C. Hydro ratepayers fund people to go out there and basically make a living knocking the stuffing out of all of their presentations to the BCUC.

It's an odd thing, right? It would be like a municipal council funding, you know, a group to come in and knock the stuffing out of a development proposal. You would never do it.

It should be based on free market. If there are people out there who want to oppose a B.C. Hydro rate application, who want to make a presentation, they should be able. They should go out and get free will donations, like the Taxpayers Federation does, and do it that way.

We don't like this government support for both sides. It just drives up the cost of everything. It's a weird quirk that I was unaware of until, actually, I was speaking with former Energy Minister Coleman one day, who mentioned that to me. I did some digging into it, and it was pretty shocking that that was happening.

M. Hunt: Can I get you to go down to number 9, with B.C. Ferries vetoing its competition? I don't understand that one either.

J. Bateman: Under the Coastal Ferry Act, B.C. Ferries gets to approve any other ferry operation. David Hahn, if you go to the section…. David Hahn was on a Vaughn Palmer TV show one day. Vaughn asked: "Why isn't there more competition in the ferries?"

Essentially, Hahn said, "Well, we get to check it for safety," which, okay, I understand. You want to have safety checks. You're transporting passengers. But: "We also have to make sure that these new company's books stand up in front of ours."

Now, I find that a little bit rich from B.C. Ferries, whose books aren't standing up particularly well on their own right now. But they literally have the ability to approve or veto their competition. It's similar to TransLink, right? TransLink has the ability to veto any or assess any transit competition in the Lower Mainland.

It's another quirk of that quasi-privatized model that B.C. Ferries is in. You either have to — we think — reign them back into government or — our preference — privatize them and essentially throw them to the wolves of competition and see what happens.

This sort of in-the-middle thing isn't working. I mean, what business is going to approve a business across the street that offers the exact same service? You just wouldn't do it.

D. Ashton (Chair): Any other questions or comments?

M. Elmore: Thanks, Jordan, for your presentation. I have a question with regards to your B.C. Hydro recommendations. Certainly, in terms of… I guess we'll to have wait for the 2013 audit to see what comes out referencing staffing levels and also the process in terms of the approval for B.C. Hydro rate applications.

Does the Taxpayers Federation have a position in terms of the contracts that were signed with independent power producers and, often, the differential in terms of market rates and long-term rates that have been signed on the contracts?

J. Bateman: It's really one of those…. You have to almost go individually through them. I know Minister Bennett has, or B.C. Hydro has, cancelled, I think, seven or eight of them recently. It just depends on the model. I mean, for some IPP producers, it'll make sense, and for other ones, it won't.

That's one of the reasons why we're supportive of having the BCUC review these things, so we can get that information out to the public. But yeah, it really is a one-by-one basis, and that's part of the problem. None of these IPPs are the same, so you actually have to look at them case by case.

G. Holman: Thanks for your presentation, Jordan. The comment you just made — would you not apply that more broadly? There are a couple of statements in here.

For example, you home in on executive salaries and bonuses at B.C. Ferries. Certainly, I have some sympathy with that view, as you probably are aware. But would you not broaden that concern? It seems to be an issue across all the Crowns, not just the salaries and bonuses themselves but the growth in the management layer. Would it be fair to say that you'd apply that sort of principle of looking at the administrative and management level to all the Crowns, not just B.C. Ferries?

J. Bateman: Absolutely. That growth of middle management is a concern to us. The way the executives are compensated is a concern to us. I thought one of the most interesting things I've read post-election was a small piece on three deputy ministers who left government, and they were paid a year's salary in severance. Their severance was something around $250,000. That's almost quaint compared to the Crown corporations. Who would have thought that we'd ever sit here and think $250,000 is a bargain? But when you compare it to a transit CEO making $450,000 a year — a quarter million dollars more than what the Seattle transit CEO makes — or you compare it to $563,000 for the B.C. Ferries CEO, clearly, there is an imbalance there.

I think it's political accountability. Every deputy minister has an elected official attached to them. If we think their pay is out of line, we can vote that person out, whereas a lot of these Crown corps hide behind their boards. There isn't that same accountability. They don't meet in public, and salaries escalate quickly.

G. Holman: Just quickly to follow up on Mable's question. I thought I heard you say, in relation to the question about IPPs, that those projects should be reviewed by the Utilities Commission. What you've got here is the Utilities Commission reviewing Hydro rate applications. Does that language also suggest they should be reviewing independent power projects as well?

J. Bateman: I would not be adverse to the BCUC looking at any long-term contract that Hydro was signing. I mean, obviously that is a commitment taxpayers are making in the future.

D. Ashton (Chair): Any other questions or comments?

Jordan, thank you very much. Thanks for coming.