STC closure added $22 million to provincial coffers: CIC report
The sale of Saskatchewan Transportation Company (STC) assets, which include buildings, buses, computers and more generated $27.6 million. The combined book value for the assets was $16.5 million, an $11.1 million profit.
The Crown Investment Corporation (CIC) received a $22 million dividend from STC’s end of operations. Wind up costs totaled $7.6 million for the former bus company. This includes $5.8 million in severance.
There will be no line-by-line breakdown of how much individual assets sold for. CIC Minister Joe Hargrave said this is being done for business confidentiality reasons.
“It’s highly competitive and people don’t want to reveal how much they overbid or underbid on any of those assets because it affects any future bids,” he said.
NDP House Leader Nicole Sarauer doesn’t buy the confidentiality argument. She said the contracts could have been drawn in a way where this information could have been made public.
“These are public assets. The public has a right to know what was made on the sale of these assets,” Sarauer said.
She added that the whole sale and wind down of public assets lacked transparency and public consultation.
The opposition have been highly critical of the decision to wind down STC last May. This has been compounded by the recent announcement Greyhound will be ceasing western Canada operations in October, except for one Vancouver to Seattle route.
Minister Hargrave attributed the decline in ridership to changing habits and a 2008 murder.
“The costs of flights are so much cheaper than they were 15 years ago. You can catch a flight to wherever for a couple hundred bucks now,” Hargrave said.
“There seemed to be a tipping point in ridership a number of years ago when there was that murder on the bus in Manitoba. It seemed to be the tipping point.
Ridership really seemed to drop like a rock after that.”
Vince Li was ultimately found not criminally responsible in the beheading death of Tim McLean on a Greyhound bus in 2008. The 2017 court ruling found Li, who now goes by Will Baker, does not pose a public threat. He was granted a full discharge.
STC historically did not pay a dividend to the CIC, due to its operations being subsidized. Prior to operational shutdown, the province estimated the next five years of subsidies would total $80 million.
STC is expected to exist for another year on paper. The Regina maintenance facility is still under provincial ownership. Once that property sells, the Crown will go through the final steps of its shutdown.
It was a financially successful year for the Crown corporations, especially the big four; SaskPower, SaskEnergy, SaskTel and SGI Canada. The consolidated income of the Crowns was $503 million, up $398.6 million from 2016/17.
This resulted in the CIC adding $205 million in dividend payments to the general revenue fund. This year $180 million was the dividend goal.
All Crown corporations, except SaskPower, pay a portion of their income to the CIC as a dividend. SaskPower hasn’t made a dividend payment since 2011 due to their debt ratio. There’s no timeline for when SaskPower will once again pay a dividend.
While having a debt ratio around 74.9 per cent debt to equity ratio, SaskPower earned $145.5 million last year.
CIC president and CEO Blair Swystun said there are numerous variables in the way, such as uncertainty around the future of coal generation in Saskatchewan.
“It’s always a matter of striking a balance, and that’s the advice that we provide to the [SaskPower] minister as well as the CIC board and the provincial cabinet,” Swystun said.
That balance includes investing in infrastructure to provide reliable service, moderating rate increases, and being able to pay dividends back to the province on behalf of the public.
Over the past five years, Crown corporations have contributed $1.3 billion to the province’s general revenue fund.
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