A recent letter from the Yukon Hospital Corporation fails to address why board members have been awarded pay raises in contravention of the Yukon Hospital Act and against the expressed will of cabinet.
An order-in-council was passed by cabinet on June 11 allowing hospital board chair Craig Tuton to be paid a minimum of $34,800 a year if he attends 12 board meetings. He used to be entitled to $3,600.
Board members have seen their 12-meeting stipend rise to $4,800 from $2,400, and they will now be paid $200 per meeting to prepare.
But the problem isn’t that the rates went up. It is when, and how the rates went up.
Tuton and the other board members have been receiving the beefier salaries for quite some time – at least since last November. And, as we’ll see in a moment, this is significant.
Members of the board voted themselves the increased salaries, and they have been setting their own pay since 1993, according to hospital CEO Joe MacGillivray.
This is not a breach of the law.
The Hospital Act states cabinet may set the board’s pay – the key word being “may.”
So, if cabinet does not set the board’s pay through an order-in-council, the board can do it.
But if cabinet sets the board’s pay, that’s it. The board cannot override the will of the government, as expressed through an Order in Council.
But apparently it did just that.
Cabinet set the board’s rate of pay on November 12, 2009. It ordered the chair would be paid $300 a day and board members would get $200.
Despite this, the board has been receiving its higher salaries since late 2009, according to both MacGillivray and Tuton.
If so, there’s a serious problem at the hospital corporation.
It is almost as if the new OIC, passed just seven months after the last, legitimizes the higher pay members had already awarded themselves.
Of course, government doesn’t work that way.
On Wednesday, MacGillivray wrote a letter on the pay issue.
“From 1993 until November 2009, the corporation established its travel rates and board member honoraria through policy, as provided for under the Hospital Act,” he wrote.
“In recent years, the role of the Yukon Hospital Corporation has expanded and the responsibilities of the corporation have increased to include the operation of facilities in Whitehorse, Watson Lake, and construction of a new facility in Dawson City. The expanding mandate of the corporation has resulted in much greater demands on its board of trustees.
“Honoraria rates of $600 per meeting day for the chair, and $400 per meeting day for board members is appropriate payment for work that these dedicated members of our community perform.”
The higher pay may be justified for the “greater demands” the board has taken on overseeing and trying to sell, through a slick PR campaign, porkbarrel hospitals it was told to build in Watson Lake and Dawson City, and managing the estimated $117 million in debt the corporation will have to assume building those facilities, its new residence and an expanded Whitehorse General Hospital.
However, in November, the government thought otherwise. And it set the pay at $300 per meeting for the chair and $200 per meeting for regular members.
The board lacks the legal authority to ignore or override that order. And yet there is strong evidence, provided by Tuton and MacGillivray, that it did exactly that, paying its members far more than cabinet authorized at the time.
This is a serious breach of trust.
There is a second, lesser principle that deserves mention here. When cabinet sets the pay for such a board, the rate is published, making it publicly available. When the board sets its own pay, the whole affair is essentially hidden from public view because accessing the minute financial details of the Crown corporation is far harder for the public to accomplish.
Case in point: For the last seven months,
the chair of the Yukon Hospital Board has been collecting 10 times his salary in contravention of the expressed order of cabinet, and only the board, the CEO and the chair knew it.
The whole affair calls into question the hospital board’s ability to manage financial matters, which is unsettling, as it is about to take on more than $100 million in public debt.
The question now is, how to rectify the situation?
At the very least, members of the board should be forced to refund the overpayment they have received since November 2009, when cabinet last ordered what they would be paid.
And the act should be amended to remove the board’s ability to set its own pay. That power should reside solely with cabinet, and publicly published through order-in-council.
If nothing else, this episode demonstrates Crown corporation boards should not have the power to set their own pay. (Richard Mostyn)