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Opinion: Gold-plated public sector severance deals need a critical review

An eye-watering severance payment to a top government official who was then immediately awarded another job has shone a spotlight on loopholes that need to be fixed to limit unnecessary costs to taxpayers.
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Public sector severance packages – which can add up to six figures – need to be revisited, writes Rob Shaw

An eye-watering severance payment to a top government official who was then immediately awarded another job has shone a spotlight on loopholes that need to be fixed to limit unnecessary costs to taxpayers.

The NDP government announced this week it had named Lori Wanamaker as chair of the BC Hydro board – a job that paid the previous chair more than $93,000 a year.

The appointment would be unremarkable, except for the fact the government had just announced it was paying Wannamaker $591,089 in severance to fire her as deputy minister to John Horgan, so that Premier David Eby could replace her with his own deputy.

Severance payments are supposed to compensate a person for abruptly lost current and future income. They use a formula that takes into account years served, age and future earning potential. Normally, if a person gets a new job within the public sector during their severance period – in this case, 18 months of pay – they either have to stop collecting the money, collect a lesser amount or repay some of the funds if they were paid out in a lump sum.

But it turns out, there’s a loophole. 

The government doesn’t consider the lucrative board appointments that it awards to people as actual jobs.

“For the purposes of severance in this case, membership on a board would not be considered employment and not subject to the re-employment and repayment provisions,” the Ministry of Finance said in a statement.

“A board appointee is not considered an employee for the purposes of repayment as an employee is under the control and direction of the organization while a board member is not.”

Fancy that.

Not only does Wanamaker get to keep her half-million-dollar severance package (paid for with public funds), but taxpayers also have to shell out for her second, new, lucrative job at BC Hydro at the same time. A sweet double-dip.

It should also be clear: Wannamaker herself hasn’t broken any rules with this deal. She’s imminently qualified for the position of Hydro board chair, having served for 30 years in the public service. By law, she’s technically entitled to the money – or, as the saying goes, entitled to her entitlements. Every last penny. 

But during an affordability crisis, with ordinary people stretched to the max by inflation and interest rates, you can forgive the public for being a tad aghast at the largess in question. 

The detailed timeline makes it even more difficult to swallow.

Turns out, then energy minister Bruce Ralston signed the order to appoint Wanamaker to the Hydro board on Nov. 18, 2022 – the same day she was removed as deputy minister to the premier as part of Eby’s transition into the job. 

That means the government offered severance with one hand, while awarding a new job with the other, all on the same day.

Current Energy Minister Josie Osborne bumped up Wanamaker’s role from ordinary board member to chairperson on Feb. 21, 2023. The promotion is effective June 1.

Opposition Liberal critic Peter Milobar said the deal raises all sorts of concerns.

“I think the public is right to be a little cynical around very large severance packages that within the space of a couple of months are now replaced with appointments on boards that pay very well that are completely under the discretion (of government),” said Milobar.

Wanamaker was one of five people terminated by the Eby administration when he took power; their collective severance totalled severance totalled $1.3 million. They were not all good deals for taxpayers, including a former deputy chief of staff who accepted a new position under Eby, made it seem like she was then going to retire and somehow managed to collect severance from the NDP government anyway.

B.C.’s severance policies are written into law, within the Public Sector Employers Act.

Clearly, they need a rewrite – or at the very least, a serious refresh.

With an economic downturn on the horizon, and government services like health care starved for cash, the loopholes in government’s gold-plated severance packages fail to pass the sniff test.

It’s public money. The NDP government should start treating it with a little more respect.

Rob Shaw has spent more than 14 years covering B.C. politics, now reporting for CHEK News and writing for Glacier Media. He is the co-author of the national bestselling book A Matter of Confidence, and a regular guest on CBC Radio.

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