The B.C. government is ordering the Insurance Corporation of B.C. to slash its budget after an unacceptable spending spree on managers and perks, the finance minister announced Thursday.But despite the move, Kevin Falcon acknowledged B.C. drivers wont see their basic insurance rates drop any time soon.Falcon released the results of an audit of ICBC, which concluded that the public insurance corporation has ballooned its management ranks during a time of economic uncertainty in which the rest of government was reining in costs. This is something, the combination of more people and higher wages, that is unacceptable, and something that is going to change and change quickly, Falcon said.In response, ICBC CEO Jon Schubert announced his resignation. Hell leave in November, but continue to collect his full salary as a consultant until June. Schubert earned $486,541 in pay and bonuses last year.ICBC is the sole provider of mandatory basic auto insurance in B.C., with more than 5,000 staff. It processes 900,000 insurance claims a year.The audit found ICBC senior management numbers ballooned almost 41 per cent from 2007 to 2011, while union staff positions dropped one per cent. The new managers enjoyed compensation hikes of 50 per cent.The managers were paid salaries and bonuses more lucrative than those for the rest of the public sector, the audit said.Signing bonuses, relocation plans, perks for vehicle allowances and other bonuses were also targeted by the audit. ICBC said it would cancel its perks program.The spending shows a disconnect between ICBCs finances and those of the B.C. government and ordinary British Columbians during tough economic times, Falcon said.The audit contained 25 recommendations, including rolling back management staffing and compensation to 2008 levels. ICBC board chairman Paul Taylor said the corporation will cut $50 million by 2013 and eliminate almost 200 staff members in the next two years, mostly from management.Still, the changes wont mean a break on insurance rates for drivers.ICBC is hiking rates this year 11.2 per cent. It says an average driver will only see a 2.1 per cent increase, or $27.The audit said ICBC continues to have difficulty keeping rates low because of declining investment income and increasing claim costs.Taylor said he hopes the savings ordered by the government will lead to insurance-rate increases at the level of inflation in the future.ICBC workers are locked in a labour dispute over wages; their union said the audit confirms an unfair compensation gap between regular staff and managers.The ICBC audit is the latest in a series of Crown corporation reviews, first announced in the governments fall 2011 throne speech.Following audits, the government has already intervened on salary, bonuses and other spending at B.C. Ferries, Community Living B.C. and B.C. Hydro, and has imposed a financial restraint package for all Crown corporation executives.NDP critic Mable Elmore called it a pattern of mismanagement from the Liberals.email@example.comLink to video and government news release.
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