The “modified equity” accounting system distorts the government’s revenue, and surplus/deficit position, by assuming revenue from ICBC is available to the government. This can cause a major distortion as occurred for 2023/24.
This Commentary explores the looming collision between the government and the auditor general over BC Hydro’s accounting.
Richard Mason, a former appointed member of the BC Utilities Commission has published an article questioning the Commission’s independence respecting BC Hydro. It is reproduced here for information.
Last week Fortescue Metals of Australia announced a major retrenchment in the development of green hydrogen projects. One must suppose that this includes the proposed facility planned for Prince George.
A very large windfarm is being planned to supply renewable electricity to a proposed green hydrogen facility in Nova Scotia. Many questions are being raised about the economics of such a project.
The $5.5 billion Cedar LNG export project is proceeding. Can the Haisla Nation afford its share of the cost?
Are the government’s objectives of dramatically reduced emissions, economic development and affordable electricity rates irreconcilable? Will the provincial government be forced to ration the supply of clean electricity? These questions are raised in the attached Commentary.
A review of Auditor General Michael Pickup's recent warning to the BC government respecting the independence of the BC Utilities Commission.
This paper has a closer look at the government's recent signal to the BC Utilities Commission respecting BC Hydro rates and future approvals.
An article that questions the rush to produce green hydrogen to reduce CO2 emissions.
The Manitoba government has joined the trend of provincial governments to politicize the pricing of auto insurance rates. Four examples are presented.
By ordering the Utilities Commission to approve BC Hydro’s new rebate regulatory account the government continues to substitute political imperatives for the economic-based rate setting oversight provided by the once independent regulator.
Finance Minister Selina Robinson mixed fiscal years and conflated taxpayers and ratepayers in explaining the funding of new measures.
Premier Eby announced a credit/rebate but no total cost or funding plan was make public. This paper provides an estimate, and discusses two funding approaches.
National public sector accountig rules require that profits or losses from self-supporting Crown corporations be caunted as government revenue, even if no cash is transferred. The net income from BC Hydro and ICBC is not transferred and distorts the true cash picture of the government's finances.
This Commentary discusses the new Royal BC Museum in light of Dr. Robin Fisher's distinction between history and historical memory. Related see
A commentary of the proposed Anti-Racism Data Act reviews a number of issues, including the presumption of systemic racism in provincial public bodies.
A new cabinet order negates the previous commitment to restore full independence to the BC Utilities Commission to regulate BC Hydro. Will the auditor general again qualify the government's financial statements?
National accounting standards require that the net income of ICBC and BC Hydro be reported as government revenue. As no actual cash is transferred from thes two Crowns this distorts understates the size of the government's planned operating deficits for the current and next three years.
The sponsors of two reports have claimed that the reports justify claims of systemic racism, but is this true?
Should the BC Utilities Commission be broadened to address social policy issues? This paper says this would be highly problematic.
The government of Manitoba has decided to increase Manitoba Hydro rates by 2.5% per year for the next three years. This has resulted in less transparency and accountibility.
A recent cabinet order has blocked any attempt by the BC Utilities Commission to lower BC Hydro's excessive profits. This is another example of the government's manipulation of the utility and the BC Utilities Commission.
The Manitoba government has sidelined the province's regulator of Manitoba Hydro, and legislated a 2.9% rate increase for the coming year. This action mirrors that of Quebec, which also "simplified" rate setting by eliminating the regulator for five years. Is there a trend?
In a new twist the BC Utilities Commission is creating and funding an intervener group to represent Residential ratepayers, at a time when its own analysticl staff has greatly ncreased. This paper reviews these developments, and suggests that the BCUC should improve its own accountability.
The government has delayed the release of its second quarter financial report, including the reports for BC Hydro and ICBC. As the reports are for actual revenue and expenditure information the government should allow these public corporations to publicly file their reports.
We lost an important advocate for ethical government. Here is the Times Colonist obit.; https://www.timescolonist.com/news/local/integrity-b-c-executive-director-dies-at-59-he-declined-liver-transplant-1.24144797
Excluding the net income (or loss) from BC Hydro and ICBC from the government's revenue results in a significant difference in the budgeted and planned surpluses for 2020/21 and the next two years.
Finance Minister Carole James suggested that the losses at ICBC have displaced government spending on other programs. This is not correct.
This Commentary reviews the government's assumption that B.C. Hydro ratepayers will subsidize the cost of electrifying the production of oil and gas in the noeth east reagion. It is a sudsidy because the cost is greater than the anticipated revenue. The social benefit of reduced carbon emissions should be paid by the government, not the ratepayers.
Auditor General Carol Bellringer has accepted the government's pledge to fully restore the B.C. Utilities Commission's authority to regulate B.C. Hydro and removed that part of her qualification on the government's 2018/19 financial statements.
This Commentary reviews the recent report by the special committee of the Ontario legislature on financial transparency. The committee was struck to examine how the previous Liberal government ignored public sector accounting standards to lower electricity rates while still claiming to balance the 2017/18 budget.
This commentary explores how the government receives $70 million annually in driver license fees while ICBC's Basic policyholders must pay the cost as part of their annual insurance. The provincial fee scheme appears contrary to a 1998 Supreme Court of Canada decision respecting fees versus taxes. The government should correct this double payment.
This commentary reviews the new five-year rates plan for B.C. Hydro, as well as the government's plan to restore the B.C. Utilities Commission's authority to regulate the public utility.
The government has directed ICBC to fund more traffic enforcement, but its more of a restoration. And why is the government not funding more police traffic enforcement instead of asking over-burdened policyholders to do it?
The inclusion of the net income of BC Hydro and the net loss of ICBC complicates the forecast of the surplus.
A committee of the Ontario legislature is holding hearings into how the previous Liberal government attempted to ignore the accounting rules to make the government books appear than was the case. What lessons might the B.C. government learn from this review?
The Ontario government has moved to clean-up certain accounting practices, including the financing of the "Fair Hydro" deferrals. The accounting adjustment of the electricity deferrals increased 2018/19 expenditures by $2,4 billion.
This paper discusses the fact that the NDP government is using cabinet orders to control ICBC's finances and keep the B.C. Utilities Commission confined. These were the tactics used by the previous government to avoid public oversight.
This paper provides an overview of why the government set aside $950 million for the 2017/18 fiscal year to begin to fix the financial troubles at B.C. Hydro. the restoration of proper accounting standards at the public power utility presents certain financial problems for the government.
The three main politic parties in Ontario are promising to reduce electricity prices, but are being vague as to what this will cost. It's time for the voters to become educated consumers.
McClearn's article in the Globe and Mail provides a useful summary of many of the issues involved in the accounting dispute between the ontario auditor general and the government. Similar issues exist in British Columbia.
This 'Commentary' paper reviews the Ontario and BC public accounts committee discussion of the oppositin by the two auditors general of the application of reguatory accounting, and the impact to the governments' financial statements.
Auditor General Carol Bellringer issued a report, http://www.bcauditor.com/sites/default/files/publications/reports/FINAL_BCUC.pdf, that reminds the government that five key recommendations of the 2014 independent task force remain outstanding. In August Ms. Bellringer qualified the government's 2016/17 financial statements, in part because BC Hydro's deferral accounts were not overseen by an independent regulator. The Canadian Press provided a limited summary (http://vancouversun.com/pmn/news-pmn/canada-news-pmn/b-c-auditor-offers-advice-on-utilities-commission-after-previous-studies/wcm/c65203d2-1811-4418-ab5b-f55f3002d5d7. DeSmog Canada's report was more comprehensive; https://www.desmog.ca/2018/03/15/auditor-general-nudges-b-c-amend-act-exempted-site-c-dam-independent-review
The national public sector accounting rules require that ICBC's net income or loss be counted in the government's revenue. The increase in the net loss reduces revenue, but there is no change in the actual cash being transferred (which is nil). This accounting anomoly requires further review.
The Alberta government has limited the 2017/18 increase in the private vehicle insurance rates to 5%. It stated that the previously allowed 10% maximum increase was not inline with its affordability priority. Background and implications are provided.
This email informs Auditor General Bellringer of recent developments respecting BC Hydro's accounting for future unbilled and uncollected revenue.
The Times Colonist editorial correctly blames the Liberal government for allowing ICBC's finances to rapidly deteriorate, and warns of hard choices to come; http://www.timescolonist.com/opinion/editorials/editorial-hard-choices-ahead-for-icbc-1.21569689.
Reprint of my article in today's Tyee; https://thetyee.ca/Opinion/2017/06/16/NDP-Faces-Mess/?utm_source=daily&utm_medium=email&utm_campaign=160617
The Green party has to help restore an ethical approach to government, which will not happen by keeping the Liberals in power. A slightly revised version was printed in The Tyee on May 18, 2017; https://thetyee.ca/Opinion/2017/05/18/End-BC-Hydro-ICBC-Shell-Games/?utm_source=daily&utm_medium=email&utm_campaign=180517
On April 19th finance minister de Jong stated that the coming four-year rate increase requirement for BC Hydro is 28%, and close to 70% for ICBC's Basic program. The government's rate suppression policy has postponed the financial reckoning.
AMPC submissions of 2013 and 2017 call for BC Hydro to moderate cost and rate increaes; http://www2.gov.bc.ca/assets/gov/farming-natural-resources-and-industry/electricity-alternative-energy/electricity/iepr/iepr_submission-association_of_major_power_consumers_round_1.pdf and http://www.bcuc.com/Documents/Proceedings/2017/DOC_48816_C9-7_AMPC-Evidence.pdf
Minister Stone attempts to defend ICBC's deficit forecasts during Question Period on February 22, 2017.
In Ontario, political decisions have driven the cost of electricity higher; http://www.theglobeandmail.com/report-on-business/economy/economic-insight/buying-quebec-hydro-power-a-dim-prospect-for-ontarians/article33603621/
This 2011 document was adopted as government policy. It contains useful detail on the principles governing the operation of public utility regulators in the UK.https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/31623/11-795-principles-for-economic-regulation.pdf
Martin Stanley's compendium of issues relating to regulation of public utilities in the UK; http://www.regulation.org.uk/