The Legislative Assembly of British Columbia

SELECT STANDING COMMITTEE ON
CROWN CORPORATIONS

REPORT

February 2002

Table of Contents

Composition of the Committee
Terms of Reference
Introduction
The Work of the Committee
Appendix A: Chronology of Crown Corporations Committees Appointed by the Legislative Assembly
Appendix B: Crown Corporations and Government Agencies That Are Part of the BC Government Reporting Entity
Appendix C: A Guide to the Operations of the Select Standing Committee on Crown Corporations

Composition of the Committee

Terms of Reference

On August 27, 2001, the Select Standing Committee on Crown Corporations was appointed to review the annual reports and performance plans of British Columbia Crown Corporations.

In addition to the powers previously conferred upon the Select Standing Committee on Crown Corporations, the Committee be empowered:

and shall report to the House as soon as possible, or following any adjournment, or at the next following Session, as the case may be; to deposit the original of its reports with the Clerk of the Legislative Assembly during a period of adjournment and upon resumption of the sittings of the House, the Chair shall present all reports to the Legislative Assembly.

Introduction

The appointment of the Select Standing Committee on Crown Corporations on August 27, 2001 represents a significant development. It marks the revival of legislative scrutiny of Crown corporations in British Columbia.

During the previous 18 years, only one select standing committee has been appointed specifically to review the performance of Crowns. However, this committee was inactive during the 36th Parliament (1996-2001). By contrast, its predecessor — the Committee on Crown Corporations — had a much higher profile between 1977 and 1983, when it conducted inquiries into BC Hydro, BC Housing Corporation, ICBC, BC Ferry Corporation and BC Rail. (See Appendix A)

The current Committee intends to reactivate the tradition of legislative scrutiny of British Columbia Crown corporations. We interpret our mandate as assessing how effectively Crown corporations are managing their resources, by conducting a review of their annual reports and service plans.

To achieve this objective, the work of the Committee has been organized to occur in two phases: the information-gathering phase and then the review process itself. This decision was made partly to avoid duplication of effort with the core services review of Crown corporations, which was underway in the fall of 2001.

As a result, during the second session of the 37th Parliament, the Committee has concentrated on the first information-gathering phase. A summary of our preparatory work is presented in the next section of the report.

Now that the Crown agencies secretariat has completed the core services review process, the Committee plans to begin the second phase of its work soon. It will involve legislative review of Crown corporations' annual reports and service plans, using the public hearing process.

The Work of the Committee

The all-party Select Standing Committee on Crown Corporations held four public meetings during the second session of the 37th Parliament. Two meetings of the agenda and procedure subcommittee also took place.

The Crown Corporations Committee held its first meeting on August 29, 2001. The first item of business was the election of the Chair, Ken Stewart, and Deputy Chair, Bill Bennett. The Committee then reviewed its terms of reference, including the logistical and procedural details of its inquiry. As part of their preparatory work, committee members decided to compile a list identifying the mandate and statutory authority for each corporation and government organization that is part of the B.C. government reporting entity. (See Appendix B)

At the second meeting on September 11, 2001, a briefing by officials representing the Crown agencies secretariat took place. The Committee learned about the secretariat's role and functions; its mandate and relationship to Crown corporations and Crown agencies; and its current work priorities and major initiatives. The CEO of the Crown agencies secretariat then outlined and illustrated the differences between "commercial Crowns" and "taxpayer-supported Crowns." The final part of her presentation focused on the relationship of Crown corporations and agencies to the government reporting entity, and on the impact of the recent amendments to the Budget Transparency and Accountability Act on Crown corporations and agencies.

Following the briefing, committee members discussed how to proceed with the development of a systematic methodology to review the performance and activities of Crown corporations, once the core service review process was completed. They also reviewed the meeting schedule.

At the third meeting on November 6, 2001, committee members were briefed by the Office of the Auditor General of British Columbia. They learned about the role of the office; its past, current and future work with Crown corporations — including work on their governance arrangements. The final part of the briefing reviewed the work the office is doing to strengthen public sector performance reporting practices, particularly by focusing on the achievement of results.

After the briefing, the committee members agreed to establish an agenda and procedure subcommittee to take on the task of developing a workplan, along with time lines, for the Committee to consider. The subcommittee's preparatory work included the preparation of a guide for the Committee's upcoming review of the operations of Crown corporations. This guide is designed to give the government organizations that appear before the Committee an understanding of what the Committee's expectations are, the types of information it requires, and examples of the specific questions it will ask. For information purposes, the guide is included in Appendix C.

At the fourth meeting on February 11, 2002, the Committee approved this report

Transcripts of meetings and the report of the Select Standing Committee on Crown Corporations are available on the Office of the Clerk of Committee's web site at: www.leg.bc.ca/cmt/.

Appendix A

Chronology of Crown Corporations Committees Appointed by the Legislative Assembly

REFERENCE:

Jack J. Kempf, MLA, "The Select Standing Committee on Crown Corporations in British Columbia," Canadian Parliamentary Review, vol. 4, no. 4, 1981.

Appendix B

Crown Corporations and Government Agencies That Are Part of the BC Government Reporting Entity

(compiled Sept. 5, 2001)

* = selected for core services review

 Appendix C

A Guide to the Operations of the Select Standing Committee on Crown Corporations

Prepared by the Agenda and Procedure Subcommittee

February 2002

INTRODUCTION

"Crown Corporations constitute an entity equal in size to the core part of government. I am committed to creating a strong and meaningful role for the Committee in overseeing the Crown Corporations of British Columbia." (Ken Stewart, Chair, SSCCC)

The Select Standing Committee on Crown Corporations (SSCCC) was appointed by the Legislature on August 27, 2001 to review the Annual Reports and Service Plans of British Columbia Crown Corporations, and to report the results of its review to the Legislative Assembly.

The scope of the Committee's review will not be limited by any restrictions or parameters set for Crown Corporations by the Crown Agencies Secretariat.

The SSCCC is authorized to examine all Crown Corporations, including those without current reporting obligations. There are 25 Crown Corporations and 29 other government organizations that qualify as Crown agencies. For the sake of simplicity, this guide will refer to all these entities as "Crown Corporations." Some Crown Corporations are part of the government reporting entity (see the attached Schedule A) and a few are not (e.g. WCB, BC Pensions Corporation, BC Investment Management Corporation).

The review by the SSCCC is not intended to duplicate the work of other legislative committees, such as the Public Accounts Committee, or to overlap with the mandate of the Core Services Review Task Force, or independent enquiries. The main objectives of the Committee's work are to enhance accountability, and to improve public performance reporting of Crown Corporations.

To carry out its work, the SSCCC is empowered to hold public hearings, when the Committee deems it necessary. In certain situations, though, the Committee may, at its discretion, characterize certain information provided by Crown Corporations as confidential.

The amended Budget Transparency and Accountability Act (BTAA) will guide the work to be done by the SSCCC. This Act stipulates that three-year Service Plans for government organizations should be tabled in the Legislative Assembly annually, commencing with the 2002/03 fiscal year. Service Plans for 2002/03 – 2004/05 will be tabled in the Legislative Assembly on February 19, 2002.

The amended BTAA also states that Service Plans should:

• Include a statement of goals,
• Identify specific objectives and performance measures,
• Supply information in relation to a project to which Section 14 applies, and
• Include prescribed information, if applicable, and other information the responsible minister or government organization considers appropriate.

The amended BTAA also stipulates that the information contained in a Service Plan for one government organization must be readily comparable to information contained in the Service Plans of other organizations to which the BTAA applies. Consequently, the Crown Agencies Secretariat has provided government organizations with guidelines, which identify the minimum content requirements for their Service Plans. The SSCCC may recommend to the Legislature that Service Plans in general, or a Service Plan for a particular Crown Corporation, include additional information.

THE REVIEW PROCESS

"Although this guide is intended to provide a structure for the work of the Committee, the lines of inquiry by the Committee into the affairs of Crown Corporations will be constrained only by the limits of the public interest." (Bill Bennett, Deputy Chair, SSCCC)

This section of the guide is intended to provide direction to Crown Corporations and to members of the SSCCC regarding the review process.

Crown Corporations should be prepared to meet the minimum information requirements outlined in the attached Table 1. As the SSCCC is authorized to take its examination of Crown Corporations beyond the specific questions contained in Table 2, the Committee will make its best efforts to identify "extra" lines of inquiry to a Crown Corporation, prior to meeting with the SSCCC.

Prior to the scheduled meeting, Crown Corporations are asked to supply to the Committee, no later than 2 weeks before a scheduled meeting, the following documents:

• Annual Report; and
• Service Plan (including 3-year budget forecast).

The SSCCC is authorized to have additional meetings with Crown Corporations, as deemed necessary by the Committee.

This guide will be reviewed periodically and refined as Crown Corporations gain more experience in developing and using Service Plans and as the Committee, in pursuance of the public interest, develops additional lines of inquiry or changes its process. In the early stages of implementing the amended BTAA, it is recognized that Service Plans may not completely meet expectations. The guide will assist the Select Standing Committee to determine whether Crown Corporations are making reasonable progress towards meeting the BTAA requirements and expectations and to identify opportunities for these corporations to improve their plans.

The attached Table 2 poses key questions for the Committee to consider. The SSCCC will assess how well the key questions are addressed in the Service Plans and form an overall judgment on the extent to which the information provided meets the amended BTAA requirements and expectations. Information will generally meet expectations if it addresses all the key questions and contains no significant deficiencies. Committee members are encouraged to identify the strengths and weaknesses of Service Plans, to identify areas that need improvement and to provide suggestions on how the Service Plans (or Annual Reports) can be improved.

COMMITTEE MEETINGS

The SSCCC plans to meet every 2 weeks, starting at the Chair's discretion. Each meeting will be scheduled for 3.5 hours. The Chair and Deputy Chair will determine the schedule for the meetings with the senior officers of Crown Corporations, with the assistance of the Office of the Clerk of Committees.

Meeting time will be divided up as follows:

• 1 hour for the presentation by a Crown Corporation;
• 1 hour for questions and discussion;
• 0.5 hours to discuss recommendations for the report;
• 0.5 hours for review of decisions taken at the previous meeting; and
• 0.5 hours for distribution and review of materials for next meeting.

REPORTING

The SSCCC will report to the Legislative Assembly the results of its review of Crown Corporations, contemporaneously with the tabling in the Legislative Assembly of the Service Plans and Annual Reports by respective ministers. The Committee will include in its reports, a summary of the answers provided to the Committee by a Crown Corporation in response to the questions set out in Table 2.

This summary is designed to inform the Legislature:

1. whether the objectives and activities of the corporations are consistent with the corporations' mandates, designated core services and government's strategic plans and priorities;
2. whether the Annual Reports and Service Plans contain sufficient information to enable the Legislature and the public to make an informed judgment on plans and performance;
3. whether the Annual Reports and Service Plans clearly establish the linkage with the provincial budget and sector policies; and
4. whether recommendations for improvement are needed.

The Chair and Deputy Chair will prepare the reports to the Legislature, with the assistance of the Office of the Clerk of the Committees.

CONCLUSION

The agenda and procedure subcommittee of the SSCCC, which drafted this guide, consisted of Ken Stewart, MLA for Maple Ridge, Bill Bennett, MLA for East Kootenay and David Hayer, MLA for Surrey Tynehead.

Given that the Committee has not been convened for approximately 20 years and that Service Plans are new to most Crown Corporations, the subcommittee points out that this guide and the Committee's review process will be dynamic and that no template will fit every circumstance. The real measure of the Committee's performance will be the extent to which Crown Corporations are made more responsive, more accountable and more open to the taxpayers of British Columbia.

SCHEDULE "A"

Crown Corporations:

• British Columbia Assessment Authority (CC)
• British Columbia Assets and Land Corporation (CC)
• British Columbia Buildings Corporation (CC)
• British Columbia Enterprise Corporation* (CC)
• British Columbia Ferry Corporation (CC)
• B.C. Community Financial Services Corporation (CC)
• British Columbia Hydro and Power Authority (CC)
• B.C. Pavilion Corporation (CC)
• BC Transportation Financing Authority* (CC)
• British Columbia Lottery Corporation (CC)
• British Columbia Railway Company (CC)
• British Columbia Trade Development Corporation* (CC)
• British Columbia Transit (CC)
• Columbia Basin Trust (CC)
• Columbia Power Corporation (CC)
• Discovery Enterprises Inc* (CC)
• Duke Point Development Limited* (CC)
• Fisheries Renewal BC* (CC)
• Forest Renewal BC* (CC)
• Homeowner Protection Office (CC)
• Insurance Corporation of British Columbia (CC)
• Okanagan Valley Tree Fruit Authority (CC)
• Pacific National Exhibition (CC)
• Provincial Capital Commission (CC)
• Provincial Rental Housing Corporation (CC)
• Rapid Transit Project 2000 Ltd (CC)
• Tourism British Columbia (CC)
• Vancouver Trade and Convention Centre Authority* (CC)
• Victoria Line Ltd* (CC)

Other Agencies:

• 552513 British Columbia Ltd¹
• 577315 BC Ltd²
• 580440 BC Ltd³*
• B.C. Festival of the Arts Society
• B.C. Games Society
• B.C. Health Care Risk Management Society
• BCIF Management Ltd
• British Columbia Arts Council
• British Columbia Health Research Foundation*
• British Columbia Heritage Trust
• British Columbia Housing Management Commission
• British Columbia Immigrant Investment Fund Ltd.
• British Columbia Liquor Distribution Branch
• British Columbia Securities Commission
• Canadian Blood Services
• Creston Valley Wildlife Management Authority Trust Fund
• First Peoples' Heritage, Language and Culture Council
• Forensic Psychiatric Services Commission
• Industry Training and Apprenticeship Commission
• Legal Services Society
• Oil and Gas Commission
• Organized Crime Agency of British Columbia Society
• Private Post Secondary Education Commission
• Science Council of British Columbia

Table 1
Checklist for Crown Corporations

Table 2
Key Reporting Principles

© 2002 Legislative Assembly of British Columbia

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