Once again a major crown corporation reports a significant loss and blames its poor investment performance. WorkSafeBC (what a wonderful ‘spin’ name) reported a drop of over $500 million in 2011’s investment income. The chairman, George Morfitt said that their investments fluctuate by up to $3,000 million per year “because of the valuation of our investments” and that WorkSafeBC has about $12 billion in assets.
These statements do not make any sense unless this public body is speculating in a big way (a 25% fluctuation in value). Although Mr. Morfitt said that they have only a 1% exposure to Europe, the European financial crisis has still affected stocks world-wide. This would have no bearing on investment income if these massive public funds had been invested in first-rate companies (large cap, market dominators) that consistently pay out real cash every year in the form of dividends. Just what types of investments have been made to produce these huge losses? If my financial advisors had produced this type of performance I would be changing them very quickly.
There appears to be an urgent need to have the investment performance of our crown corporations reviewed every year by an independent group of experts (and the details made public) to see if we are getting good value. As Mr. Morfitt was previously a BC Auditor General, who “oversaw accountability initiatives in the public sector” I am sure he would welcome this greater level of transparency.
Herb Spencer, Surrey