(An improved version of this review of the AG’s report on OPG is posted on the TVO The Agenda blog site here. The original posting is left here in case anyone has linked to it.)
Yesterday, the provincial Auditor General issued her annual report, including a chapter on OPG‘s wild no-limits compensation party. If Ontario is to restore a competitive cost of living and cost of doing business, we must redirect the power system generally to behave more responsibly.
The press release issued by the AG understates many of the substantive findings in the report itself. For example, the press release states, “Earnings and benefits were significantly more generous at OPG than for comparable positions in the Ontario Public Service.” In Figure 8 of the report, average compensation for particular positions at OPG are compared with the top compensation paid in the Ontario Public Service for equivalent positions. In the case of director level accounting positions, the top pay in the OPS is about $130k while at OPG the average pay in the equivalent position is about $230k.
The AG’s findings on OPG should lead to an investigation of the compensation arrangements at other Ontario Hydro successor agencies, including the OPA.
There is an eternal character to today’s AG story. The Ontario Energy Board expressed concern about excessive compensation at Ontario Hydro in the 1980s. In 2007, the Ontario government commissioned the “Agency Review Panel” to provide high level advice to the government on how to manage the sector. That panel found that “total operating, maintenance and administration (OM&A) expenses for the provincial agencies in the electricity sector increased by 4.3 per cent a year on average between 1998 and 2006.”
On CBC’s Here and Now last night, I attempted to make the point that the irresponsible compensation practices are endemic to Ontario’s electricity sector. The sector has cultivated an image that they are a special priesthood deserving of very special privileges. The average compensation for the five top municipal water utility executives in Ontario — very highly qualified people (no phoney CVs, like Toronto Hydro’s CEO) with extremely demanding positions providing an essential service — earn average annual compensation of about $189k with the highest paid person at about $229k.