Finance Minister Carole Taylor is defending the pay of Partnerships British
Columbia president and CEO Larry Blain.
In the year ending last March 31, Blain earned $519,448, according to recently released financial statements. He was also paid another $45,325 in expenses.
“When Larry Blain signed his contract, it was, in part, to bring someone with tremendous financial experience in the private sector into the public sector and see if he couldn’t build a model,” Taylor told the Georgia Straight. “His was a very specialized contract that recognized he’d have to build it from the bottom up.” She added that Blain’s wages included “performance pay”.
However, Taylor did say that Blain’s bonus scheme—based, in part, on the number of P3s undertaken by Partnerships BC—will likely be reexamined now that Premier Gordon Campbell has ordered all large provincially funded capital projects to first go through Partnerships BC, which aims at promoting public-private partnerships (P3s).
On October 27, Campbell told the annual convention of the Union of B.C. Municipalities in Victoria that the province will require all provincially funded capital projects worth more than $20 million to first be vetted by Partnerships BC to see whether or not they work as P3s.
As reported in the Straight last March, Blain’s contract, signed on January 3, 2003, entitles him to a bonus of up to 80 percent of his base pay, which reached $329,600 effective April 1, 2005. Before joining Partnerships BC, Blain was managing director of RBC Capital Markets. He was a member of the B.C. Liberals’ 2001 transition team.
Six other Partnerships BC officials earned more than $150,000 last year. The company’s 2005–06 annual report shows that Partnerships BC earned $1.46 million last year, compared with $290,000 the previous year. However, very little, if any, of the corporation’s revenue came from the private sector.
The corporation reported receiving $1.8 million from the province. Almost all the rest of its revenue came from $5.29 million in “work fees”. All of the clients listed in the report as paying these fees are public
agencies, including the B.C. ministries of Transportation, Health, Education, and Sustainable Resource Management. Other public agencies paying the fees included Royal Roads University, the University of Northern B.C., the Yukon Government, the Province of Quebec, the Resort Municipality of Whistler, and TransLink.
Meanwhile, Campbell’s recent announcement about Partnerships BC is drawing flak from a union leader and the NDP. According to his prepared speech notes, Campbell told UBCM delegates that “P3s save money, transfer risk, and add great value through design innovations and private-sector ingenuity.”
But Bruce Ralston, the NDP’s finance critic, told the Straight that Campbell’s announcement now places the onus on municipalities and other public agencies to prove that a P3 wouldn’t be better.
“Given the way that they treat the evidence in those things, it’s a bit stacked,” Ralston said, adding that the new requirement could well cost taxpayers more money.
The Canadian Union of Public Employees calls Campbell’s announcement a “disaster” for municipalities.
CUPE BC secretary-treasurer Mark Hancock told the Straight that the new policy changes the rules about privatization of public services by taking control of capital projects away from municipalities.
“You have to let Campbell’s friends do it,” Hancock said. “Most communities in B.C., I think, want to retain ownership and operation [of public services].”
Taylor told the Straight that both Partnerships BC and her ministry are still working out the new requirements for large capital projects.
“This is a new model that we will be looking at as a result of the premier’s announcement at UBCM,” Taylor said, adding that the default position is that the projects will be done as P3s. Taylor also said that details about how the final decision will be made have yet to be decided.
“When you have new ideas, I think it takes time for people to see where the benefits are,” she said.
The view that P3s are always successful has far from universal acceptance. Last month—in a report for the Canadian Centre for Policy Alternatives—economist Marvin Shaffer showed that the Sea to Sky highway project, a P3, will cost $220 million more than it would have if it had been done using the government’s traditional financing and procurement processes.