The ethos around today's column is that if we don't function economically, whether is in business or government, all the altruistic thoughts we may have, won't be functional or practical. We have a number of Crown Corporations in this Province that we can monetize and extricate more value from if they were private corporations. My favourite example of this is Service New Brunswick (SNB).
SNB provides some 270 public services to citizens in New Brunswick. This includes taking payments and services such as water and sewer for 58 New Brunswick municipalities. It serves the public via three channels:
- Online;
- Over the phone;
- Over the counter;
Total transactions in 2004-2005 for the corporation amounted to 5.1 million. They occurred in government service delivery, registries, property assessment and geographic information infrastructure. This was an increase of 13 per cent over the prior year. Of these transactions, 44 per cent were electronic compared to 32 per cent just three years ago. Online motor vehicle registration renewals alone increased by 28 per cent compared to the previous year.
During the past fiscal year, SNB has undertaken several major initiatives to improve services to business and won prestigious awards at the CGR (e-government) Awards of Excellence. SNB's efforts to improve service delivery to businesses have contributed to a high customer satisfaction rating compared to other jurisdictions across Canada.
SNB has created very valuable intellectual properties over the past few years and has received licencing revenues of more than $400,000 annually from the province of Quebec and other jurisdictions around the world.
This Crown Corporation is mandated by its legislation to be administered by its board of directors on a commercial basis 'respecting' sound business practices as per their annual report. Although I believe this to be all true, I also believe that this asset would be best served in the private sector. Here is why "...
In 2004-2005 this Crown Corporation made $780,145 on $50,844,814 for a paltry net-per-cent return of net income of 1.5 per cent. The return on equity of $26,576,956 is 2.9 per cent. This in a normal business organization is truly unacceptable. Remember, this organization is a monopoly providing services in New Brunswick that no one else can provide. If you compare SNB to Teranet which is Ontario's equivalent, then SNB is overstaffed by 50 per cent or $15,000,000 per annum on a comparable basis.
Mr. Finance Minister, there are numerous ways to monetize this asset, but by putting it in an income trust I believe the taxpayers of New Brunswick might get $125 to $150 million for this jewel. At the current rate of $780,000 net profit per annum it would take centuries to get our money back versus the income trust route. Let's take the capital we could receive and invest it in Education and Healthcare so that these two important areas of our society can flourish and more importantly be sustainable. There is absolutely nothing wrong with productive change. The legacy to be left for our children may be the most important in the history of this province.
Autor/Author: Rick Buckingham
Quelle/Source: Canada East, 30.05.2006
