Opposition fumes over bonus to NB Power CEO

The New Brunswick government will not force Crown corporations to cancel salary bonuses for their executives even as it is freezing salaries for MLAs, ministers and senior government officials.

The Liberals were forced onto the defensive on Tuesday, a day they were intending to bask in the positive attention garnered by a record capital budget. Instead, the Opposition Conservatives were grilling them on a $145,000 bonus paidto David Hay, president and chief executive officer of NB Power.

Finance Minister Victor Boudreau said in the legislature he was freezing salaries for senior officials but wouldn't force Crown corporations to do the same.

"I will be sending out a letter to each of the board chairs asking them to respect government's decisions on cancelling these executive bonuses," Boudreau said.

Boudreau said Crown corporations, such as NB Power, operate at arm's length from the government.

But Opposition Leader David Alward questioned how much at arm's length decision-making at NB Power actually can be these days. Alward pointed out that Francis McGuire, the chairman of NB Power's board, who awarded the bonus to Hay, is a close ally of Premier Shawn Graham.

"What we have today is a government in full damage control, a premier in full damage control," Alward said.

Hay's total pay package hit $340,825 in 2006-07, the most recent available information.

Energy Minister Jack Keir said he learned of the extra payment to Hay on Saturday in the media.

The province's finance minister has already announced that MLAs, ministers and top civil servants will forgo planned raises because of the economic slowdown. The New Brunswick government had been planning for a $19-million surplus in 2008-09, but it is now forecasting a $285-million deficit this year and is warning about another large dip into the red next year.

Bonuses are not a new concept at the provincial utility. Under the former Conservative government, NB Power executives and senior officials were permitted to haul in bonuses if the company made money and they hit certain personal or departmental objectives.

The former government then suspended the program months before it called the 2006 election.

McGuire decided in June that executives could be permitted to earn bonuses of up to 25 per cent of their salaryif they met 10 key performance indicators that would be set up by the utility's board of directors.

McGuire, who is also the president and chief executive officer of Major Drilling Group International, said bonuses are used in the private sector to motivate executives. The chairman has said that the utility cannot afford to pay its senior executives as much as other power corporations so the bonuses would help keep these top employees in New Brunswick.