Here’s the scoop on the lawyers, engineers and one accountant that decide on what we consume, how much it costs, and who gets served.
The three women and six men on Nova Scotia’s Utility and Review Board make regulatory and adjudication decisions on a stunning array of subjects – everything from classifying movies to setting electricity rates. They regulate the rules for gaming, bridges, booze, buses, natural gas, payday loans, car insurance, gas pricing, railways and municipal water and sewage rates.
In short, if an industry affects a lot of people, is long-lived and involves heavy capital, chances are the UARB regulates what can be charged, the terms of services and whether businesses can be compelled to provide service. They also settle disputes. The impact of these nine people on Nova Scotia’s 950,000 people is hefty, to say the least.
The board is the result of the amalgamation of four other boards (Commissioners of Public Utilities, Municipal Board, Expropriations Compensation Board and Tax Review Board) in 1992 “as a cost reduction measure,” says UARB director Paul Allen. “Why have four to five offices and staffs?” He says the merger resulted in savings of $500,000 a year in administration.
Since then, UARB has also been given additional responsibilities related to victim services, regulating natural gas distribution and pipelines, alcohol and gaming, film classification, railway licensing, payday loans, insurance rates and petroleum pricing. The model is unique in Canada, Allen says.
In other provinces, “there are numerous bodies” doing the equivalent work. “Every province has a power board; many have water boards and most have natural gas boards, and fire-related issues are sometimes dealt with by the courts and sometimes by boards, but we have not found anybody with as broad a mandate as the UARB.”
Nine individuals deciding our fates on so many economic, environmental and ethical facets of our lives is a scary thought, but Allen insists the model allows for a consistent decision-making process. “If you had 32 statutes and nine different boards, each would need a different command structure, and each would function differently.”
In other provinces, many of the decisions made at the UARB lie with government. In theory, this makes decisions more accountable to the electoral public. But David Roberts, a managing partner in the Halifax office of Pink Larkin law firm who is retained on an ongoing basis by the board as a consumer advocate, says that in some cases we’re better off having decisions made independently of government, because the process is governed by strict rules of fairness.
“If this decision making wasn’t done by the board it would be made in government bureaucracy and be less transparent,” he says. He acknowledges, however, that the massive scope of the UARB “tests the ability of members to deal with widely different subject matters, some of which have significant social policy impacts.”
Lawyering social good
Last November Roberts argued at a hearing for lower maximum interest rates on payday loans – short-term, high-interest loans that profit from low-income earners struggling cheque to cheque. The board did lower rates from $31 to $25 per $100 borrowed, but not by the extent Roberts argued for. The rates remain the highest in the country and equal an annual interest rate of 650 percent.
Roberts says now that his main concern with the board is its ability to deal with social implications. “Sometimes it’s the government’s way of not having to make decisions itself.”
While in some cases that may work well for society, Roberts says the government must still deal with ethical decisions on what is and isn’t legally legitimate. “Payday loans are legal and government decided years ago that we’d participate in them, so they’ve accepted their legitimacy and the board regulates them.”
This November, the province proposed changes to the Consumer Protection Act, on the recommendation of the UARB, requiring online payday lenders to be licensed in Nova Scotia and maintain a physical presence here.
According to the government press release, “The department has already implemented two other recommendations by the Utility and Review Board. Payday lenders are now required to include the cost of borrowing in advertising materials, and to report the number of repeat loans to Service Nova Scotia and Municipal Relations.” But the loans are still legal.
Bruce Wark, a veteran Nova Scotia journalist and former King’s professor, covered the payday loans hearings for The Coast and is critical of the inadequacy of the proceedings to understand the social issues – poverty and addictions to gambling and drugs---behind the rates they were setting. He wrote that no poor people appeared as witnesses during the hearings, and that payday loan industry testimony dominated.
“It's really a forum for lawyers and the ones hired by big business dominate,” Wark says now. “The payday loans hearings were held under the guise of protecting payday loan borrowers under the Consumer Protection Act. In actual fact, the UARB was most sympathetic to the big payday lenders…The UARB converted consumer protection into protection for an extremely profitable and predatory business.”
The bias question
Of the six men and three women currently on the board, seven are lawyers and two are engineers. One of the engineers is also a chartered accountant. Six have backgrounds primarily in the private sector and three have mainly government backgrounds.
They all volunteer outside of their UARB work, but none have much if any work experience with the nonprofit sector. They are appointed in part because of their expertise, and Allen says they tend to hear cases on matters they know the most about.
For example, Peter Gurnham, the chair, often rules on matters pertaining to utility issues, including Nova Scotia Power Incorperated’s rates. Gurnham was managing partner at Cox Hanson O'Reilly Matheson (now Cox & Palmer) for nine years, where one of his clients was Nova Scotia Power Incorporated on rate and regulatory matters.
Gurnham didn’t hesitate to chastise NSPI at a rate hearing on Oct. 26, but in the end a 5.6 percent rate increase was approved, along with fuel-adjustment surcharge approved Dec. 9, ranging from 3 to 6.8 percent per customer. The board did, however, approve an electricity-rate discount for the Bowater Mersey Paper Co. Ltd. and NewPage Port Hawkesbury Ltd. paper mills on Nov. 29. Households will cover the $39 million difference.
There is no way to know how much influence past government and business affiliations has on rulings and, seemingly, little way to avoid such conflicts of interest in a small province with a limited number of professionals. To its credit, UARB has implemented a rigorous recruitment process that attempts to minimize political patronage.
In 2000 the PC government published fair-hiring guidelines requiring a hiring committee of the chair, a government-appointed human resources professional, a member of an administrative tribunal from another province and a representative of the appropriate professional association. (Also, candidates must have “an absence of pomposity and authoritarian tendencies.”)
Anyone can apply for the position of board member, which at the full-time rate pays between $134,000 and $175,000 annually. The committee identifies three to five top candidates and sends their biographies to cabinet, which makes the final selections. The same process is used for judges. At any time there are up to 10 full-time and eight part-time members, but at the moment all nine members are full-time.
“I haven’t seen any evidence of partisanship,” Roberts says. “They are appointed because of their expertise. There are engineers on the board and some of the work is highly technical. They go into the minutiae of Nova Scotia Power.”
As an outside observer, Wark feels the board needs more accountability to the public. “The problem is that the UARB is appointed, not elected and it's run in a quasi-judicial way making it difficult for the general public to participate in a meaningful way,” he says. “The Board is a useful device for converting broad and contentious political issues into seemingly narrow, technical ones.”
Allen counters that a court-like process is preferable because board members don’t need to worry about the popularity of their decisions. “In Saskatchewan the utilities board was dissolved because it made a politically unpopular decision.”
Allen also points to the reviews process as a second chance for advocates who feel they’ve been wronged by a UARB decision. “Decisions can be appealed if the board is believed to have made a legal mistake,” he says.
Appeals go to the Nova Scotia Court of Appeal, then to the Supreme Court of Canada. That means UARB’s finality is equal to the Supreme Court of Nova Scotia. “There have been 24 appeals in five years,” Allen says. Only one decision was overturned, and another was revised. But, he says, “some very effective appeals have been launched by citizens.”
