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Finance

Public Accounts confirm economic impacts of COVID-19

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Finance

Public Accounts confirm economic impacts of COVID-19

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Ministry of Finance
Media Relations
250 213-7724
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Media Contacts
Ministry of Finance
Media Relations
250 213-7724

Backgrounders

Public Accounts 2019-20 highlights

More investments in capital infrastructure, like schools and hospitals, continue to build a strong economy with opportunities for British Columbians and will support a strong economic recovery through COVID-19.

Economic highlights:

  • Provincial GDP for 2019 grew by 2.8%, the third-highest in Canada and higher than the Canadian average of 1.7%.
  • Taxpayer-supported debt to GDP is 15.1%, the second-lowest in the country and only 0.1% higher than forecast in Budget 2019.
  • B.C. continues to be the only province in Canada to hold a “AAA” credit rating.
  • On an annual basis, B.C. had the lowest unemployment rate in Canada in 2019, with an average of 4.7%.

COVID-19 impacts:

  • COVID-19 led to an estimated loss of $397 million in personal income tax revenue and $171 million in property tax revenue.
  • Lower market investment values created an ICBC impairment loss of $298 million.
  • $11 million in core government and $35 million in health authority costs are attributed to the final quarter of the fiscal year 2019-20.
  • The Province received $68 million through the federal Canada Health Transfer before the fiscal year-end.

Operating results:

  • The first three quarters of the 2019-20 fiscal year reflect a modest surplus and steady economic growth.
  • The unanticipated impacts of COVID-19 resulted in a year-end deficit of $321 million, $595 million lower than the surplus forecast in Budget 2019.
  • Revenue increased by $1.5 billion over the previous fiscal year and was $387 million lower than expected in Budget 2019.
  • Expenses increased by $3.4 billion over the previous fiscal year for program investments and were higher than budgeted by $708 million.

Capital spending:

  • Public Accounts 2019-20 include a total of $4.8 billion in taxpayer-supported capital spending on hospitals, schools, post-secondary institutions (such as student housing), transit and roads.
  • Total capital spending was $1.5 billion below Budget 2019’s projection due to project-scheduling changes.

Debt levels:

  • Governments, like the private sector, borrow to finance building long-lasting capital infrastructure, such as schools, hospitals and highways.
  • Taxpayer-supported debt levels increased by $3.5 billion in 2019-20, mostly due to capital project spending, including schools and highways.
  • Self-supported provincial debt increased by $2.7 million for investments in capital infrastructure power projects.
  • The total debt for 2019-20 was $387 million lower than projected in Budget 2019.
  • Despite the need for increased borrowing and higher debt levels, B.C. continues to have among the best debt metrics and credit ratings compared to other Canadian provinces and will benefit from low interest rates.

Fiscal challenges:

  • Public Accounts 2019-20 show the changes government is making to reform ICBC are stabilizing the Province’s public auto insurer.
  • The total net loss of ICBC in 2019-20 was $376 million, $777 million less than the previous year’s net loss of over $1.1 billion.
  • Speculation and vacancy tax revenues were lower than anticipated in 2019-20, a sign that the tax is working to prevent much-needed rental units from sitting vacant, leading to a 19% increase in available long-term rental units.
Public sector executive compensation 2019-20

Public sector compensation is a significant and necessary cost to ensure the stable delivery of public services. Government continues to be committed to ensuring that executive compensation is fair and transparent for the public, and that public sector boards are held accountable for their compensation decisions.

This is the 13th year that the Ministry of Finance has disclosed the total compensation paid to senior management employees working in the province’s key decision-making positions across B.C.’s public sector. The annual disclosure reflects compensation decisions made prior to March 31 for the fiscal year of 2019-20.

Government is committed to ensuring British Columbians continue to have access to high-quality services from the public sector. While government continues to implement BC’s Restart Plan and ensure these services are maintained, it is prudent to put a pause on compensation increases for the most highly paid leadership roles in the public sector during the coming year. This direction will apply to chief executive officers, vice-presidents, deputy ministers, assistant deputy ministers and comparable roles across the public sector.

While the authority of the Public Sector Employers Act does not include K-12 public school superintendents, there is an expectation the boards of education responsible for these compensation decisions will honour the spirit and intent of this direction.

British Columbia continues to be a national leader in reporting standards of executive compensation, which includes base salary, pensions, performance-based holdbacks or pay, severances and an explanation of the compensation paid.

The Public Sector Employers Act requires disclosure of an organization’s CEO/president and the next four highest-ranking or highest-paid executives with decision-making authority, earning an annualized base salary of $125,000 or more during the previous fiscal year.

These disclosure requirements apply to more than 120 of B.C.’s public sector employers, including the public service, Crown corporations, post-secondary institutions, research universities and health authorities. The 60 K-12 school districts disclose by the end of the year.

Disclosure statements can be found on the websites of the employers, as well as the Public Sector Employers’ Council Secretariat:
https://www2.gov.bc.ca/gov/content/governments/services-for-government/public-sectormanagement/compensation/executive-compensation-disclosures

The highest paid executives in B.C.'s public sector in 2019-20:

1. Thomas Bechard, president and CEO, Powerex

Salary: $358,800
Holdback/bonus: $540,000
Benefits: $19,249
Pension: $17,474
All other compensation: $2,322
Total compensation 2019-20: $937,845
Total compensation 2018-19: $938,499

2. Santa J. Ono, president and vice-chancellor, University of British Columbia

Salary: $475,483
Holdback/bonus: $0
Benefits: $12,372
Pension: $46,572
All other compensation: $70,798
Total compensation 2019-20: $605,225
Total compensation 2018-19: $601,772

3. Chris ORiley, president and CEO, BC Hydro

Salary: $370,190
Holdback/bonus: $30,871
Benefits: $22,330
Pension: $93,658
All other compensation: $49,035
Total compensation 2019-20: $566,084
Total compensation 2018-19: $554,900

4. Shelley Legin, CFO and vice-president administration, Vancouver Island University

Salary: $162,574
Holdback/bonus: $0
Benefits: $8,801
Pension: $16,810
All other compensation: $333,371
Total compensation 2019-20: $521,556
Total compensation 2018-19: $231,995

5. Brenda Leong, chair, BC Securities Commission

Salary: $452,039
Holdback/bonus: $0
Benefits: $10,980
Pension: $44,526
All other compensation: $7,658
Total compensation 2019-20: $515,203
Total compensation 2018-19: $502,848

6. Nicolas Jimenez, president and CEO, ICBC

Salary: $390,606
Holdback/bonus: $0
Benefits: $16,302
Pension: $49,607
All other compensation: $18,165
Total compensation 2019-20: $474,680
Total compensation 2018-19: $468,783

7. Andrew Szeri, vice-president academic and provost, University of British Columbia

Salary: $402,441
Holdback/bonus: $0
Benefits: $8,715
Pension: $39,268
All other compensation: $1,950
Total compensation 2019-20: $452,374
Total compensation 2018-19: $444,415

8. Andrew Petter, president, Simon Fraser University

Salary: $332,665
Holdback/bonus: $33,000
Benefits: $8,807
Pension: $32,847
All other compensation: $36,531
Total compensation 2019-20: $443,850
Total compensation 2018-19: $439,910

9. James Cassels, president and vice chancellor, University of Victoria

Salary: $387,848
Holdback/bonus: $0
Benefits: $7,580
Pension: $47,633
All other compensation: $146
Total compensation 2019-20: $443,207
Total compensation 2018-19: $432,979

10. David Wong, executive vice-president and CFO, finance, tech, supply chain, BC Hydro

Salary: $291,544
Holdback/bonus: $48,529
Benefits: $20,521
Pension: $73,761
All other compensation: $3,400
Total compensation 2019-20: $437,755
Total compensation 2018-19: $268,054

Note: Total compensation includes base salary, performance-based holdback or pay, statutory and health benefits and pension contributions, as well as other allowances and/or payments, such as vacation payout, sick leave payout, vehicle allowance, paid parking, lump sum severance, retirement allowance, professional fees and administrative leave.

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