HEABC Substantially Controls the BC Nurses' Union
HEABC bribed BCNU with $100 million in public funds to accept a new collective agreement
The Health Science Association (HSA) and the BC Nurses' Union (BCNU) form the Nurses Bargaining Association (NBA), which negotiates with the Health Employers Association of BC (HEABC). HEABC exerts significant financial control over BCNU by contributing large sums of money, allowing HEABC to engage in unfair labour practices that undermine BCNU's ability to effectively represent its members.
HEABC’s Unfair Labour Practice
From its 2023 financial statements, here’s what BCNU’s stage four corruption cancer looks like:
The HEABC's excessive and mismanaged contributions of public funds to the BCNU appear to violate Section 6 of the BC Labour Relations Code's prohibition on employers financially supporting a union.
An unfair labour practice violation can be the root cause of broader violations of the BC Labour Relations Code, such as:
Section 11: Requirement to Bargain in Good Faith (without ulterior motives) and
In the case of HEABC and BCNU, the unfair labour practice of contributing hundreds of millions of dollars likely led to bad faith collective bargaining and the union's failure to fairly represent all of its members.
To demonstrate the occurrence of an unfair labour practice between the BCNU and the HEABC, I will use multiple references from the Accounting Standards for Private Enterprises (ASPE) Briefing on Accounting for Investments published by CPA Canada in October 2020.
The ASPE Briefing (p. 4) clarifies the applicability of this approach. The BCNU, as a not-for-profit organization, is subject to these accounting standards.
The ASPE Briefing (p. 18) outlines the accounting standards for a parent-subsidiary relationship:
Applying the accounting concepts of subsidiary and control can help demonstrate the existence of an unfair labour practice. Specifically, I will show that the substantial relationship between HEABC and BCNU is akin to that of a parent company and its subsidiary.
Does HEABC Control BCNU?
HEABC-Financed Retiree Benefits Program (RBP) Fund is the Ongoing Bribery of BCNU
HEABC's influence over BCNU is evident through its ability to collect 1% of BCNU members' wages from employers and periodically transfer those funds to BCNU. This funding mechanism, outlined in the NBA Retiree Benefits Program (Section 7), demonstrates HEABC's continuing power and influence over BCNU.
7.01 describes the 1% wage collected as a “courtesy,” and HEABC is not liable for not paying it.
7.02 HEABC can stop funding the RBP at any time, and BCNU is not obligated to pursue collection, which would be in the best interests of its members.
7.03 The RBP Committee, composed of BCNU Treasurer Sharon Sponton, BCNU Executive Councillor for Pensions Meghan Friesen, and four others, do not have the responsibility of funding the RBP.
7.04 The best financial interest of the retired nurses is to receive a portion of the investment returns from the RBP (Retirement Benefit Plan) that is proportional to the wages they accumulated over their careers. However, retired nurses have not substantially received these funds, even though 1% of their wages funded the RBP.
The following table shows the annual RBP Fund contributions from HEABC's taxpayer funds compared to the expenses incurred by BCNU for retired nurses. It demonstrates that BCNU and HEABC misled and took advantage of nurses.
The funding of the RBP appears to be a dishonest scheme worded in doublespeak that amounts to continuous bribery of BCNU and racketeering1 of tax-payer monies. This suggests that the collective bargaining process for all previous agreements since the inception of the RBP was not conducted in good faith.
The Origin and Evolution of the RBP
The Retiree Benefits Program (RBP) was created due to a bureaucratic impasse. The BC Pension Corporation was supposed to administer a 1% market adjustment as a tax-free fund but was unable to do so, leading the funds to end up with the BC Nurses' Union (BCNU) instead. Since the inception of the RBP, BCNU has failed to resolve this issue.
The RBP (section 1.10) outlines the initial intention of providing inflation relief to retired nurses, an objective that has long been abandoned.
Furthermore, the RBP has been restated at least five times since its adoption, highlighting its failure and lack of a credible and good-faith purpose.
According to the RBP's most recent restatement on June 26th, 2023, the RBP's benefits remain linked to a reimbursement schedule for MSP premiums from 2017 - 2018, even though the MSP program was subsequently cancelled. This adds support to the RBP serving no valid purpose beyond functioning as an ongoing bribery scheme and a cunning device.
BCNU is aware that the Retired Benefit Plan (RBP) fund is not being used as intended. In an attempt to create the semblance of a legitimate purpose, the BCNU has made one-time payments of $500 to 9,671 retirees in 2022 and 2023, totalling $4,835,500 - just 0.9% of the $499.5 million RBP fund. This represents a negligible fraction of the fund's total assets.
The BCNU expensed $5,512,107 to administer these $500 payments, meaning over $676,000 in overhead costs were incurred, or $70 per $500 payment. This excessive administrative spending is concerning and does a disservice to the retired nurses who the fund is meant to support.
Strategic Financing and Operating Policies of BCNU
Back to the issue of control in parent-subsidiary relationships from accounting standards; If BCNU had control over the RBP Fund, it could have chosen to distribute a substantial portion of the funds to retired nurses, promoting their socioeconomic well-being. However, the fact that this did not occur suggests one of two possibilities: either BCNU does not control the RBP Fund, or BCNU is colluding with HEABC to withhold funds from the retired nurses.
Alternatively, the failure to disburse the RBP funds may be due to incompetence if BCNU did not hire actuaries to develop appropriate payout plans. Regardless of the reason, the outcome represents a failure by BCNU to adequately represent the interests of the nurses.
The key strategic operating policies controlled by the collusion of HEABC and BCNU leadership include decisions regarding:
Whether to call a strike
Which grievances to pursue (e.g., COVID-19 mandate non-compliant terminated nurse grievances are in limbo)
Which long-term disability claim denials to appeal (e.g., COVID-19 vaccine-injured nurses are likely left without recourse)
Defending bodily autonomy (e.g., BCNU won against HEABC's vaccinate-or-mask flu policy in December 2019, but took no action on the COVID-19 vaccination mandate)
Which employer policies to oppose (e.g., harmful and ineffective COVID-19 vaccine mandates)
The ASPE Briefing (p. 18) explains substantive rights lead to control over these key operational decisions.
The ASPE Briefing proposes four questions to determine whether an entity’s rights are considered substantive:
Are there any barriers to exercising the rights? According to Section 7.01 of the Retiree Benefits Program, no legal barriers prevent HEABC from exercising its right to stop the 1% deduction from nurses' wages that funds the Retiree Benefits Program.
Does the right need to be exercised by a large or collective group? No. HEABC can, at any point in time, stop funding the RBP Fund.
Are the rights currently exercisable? Yes.
Will the holder benefit from exercising their rights? Yes. HEABC can coerce BCNU’s operating policies, such as not going on strike, by stopping funding the RBP.
Is BCNU a subsidiary of HEABC?
The ASPE Briefing outlines the key concepts defining a subsidiary, including "control,” "the ability to obtain future economic benefits from the enterprise's resources," and "exposure to the associated risks."
An organization can be considered a subsidiary even if it does not have a formal share structure where another entity owns voting power. For example, BCNU is a not-for-profit corporation without a voting share structure. Yet, it can still be classified as a subsidiary based on the substance of its contractual relationships, such as the collective agreement with HEABC, or the Nurses' Bargaining Association Retiree Benefits Program, rather than the legal form of those relationships.
As described previously, HEABC maintains control over BCNU. This control allows HEABC to avoid the potential liabilities and expenses that would arise if BCNU adopted alternative strategic operating policies.
By evading a nurses' strike, HEABC secures an important strategic and economic advantage, though this comes at the cost of perpetuating substandard healthcare management practices.
HEABC outsources some of its employee benefits administration to BCNU, which provides an economic benefit. HEABC has contributed a substantial $616 million to BCNU, with most of those funds typically handled by an employer rather than a union.
HEABC provides BCNU funding for a range of employee benefits, including retiree benefits, training, education, assistance, registration reimbursements, and mental health service reimbursements through the Nurse Support Fund. Typically, a large organization's human resources department would manage the administration of these benefits. However, through the collective agreement, HEABC has outsourced employee benefits administration to BCNU. This arrangement exposes HEABC to the risk that BCNU's resources and staff may fail to dispense employee benefits properly.
It’s abnormal to find employee benefits administration functions dispensed by a union. The outsourcing of employee benefits to BCNU stems from a subversion of the collective agreement, further reinforcing HEABC's contractual control over BCNU.
Change of Language in BCNU’s Auditor Opinion During Bargaining Year
The change in language used by KPMG, the auditor, in its Basis for Qualified Audit Opinion between 2022 and 2023 regarding how BCNU records membership dues revenues indicates HEABC's control and BCNU's subsidiary relationship to HEABC.
In 2022, BCNU’s membership dues revenues are “received” from employers.
In 2022, BCNU members unambiguously paid their union dues, with employers merely acting as a conduit. The Basis for Qualified Opinion referenced the "employer" only once. In 2023, employers collected and reported BCNU's membership dues revenues.
The 2023 membership dues are collected by employers and reported to BCNU, rather than being directly received by the union. The Basis for Qualified Opinion emphasizes this employer-centric process, mentioning "employer" four times.
KPMG's change in audit opinion language for BCNU's financial statements signals to users of BCNU’s financial statements that they should exercise increased caution.
Since 2018, whether the membership fees are accurate is uncertain, as they may be higher or lower. Essentially, BCNU's membership fee income relies on the employers' reports, not necessarily reflecting the actual amount received by BCNU. BCNU lacks the authority to ensure the accuracy and completeness of its income. The shift in language from "income received" to "income collected" and "reported to BCNU" may imply pressure from employers to comply with specific healthcare management policies or risk not remitting union fees.
A parent-subsidiary relationship is often characterized by one organization controlling the revenue recognition of another.
Consequences of HEABC’s Unfair Labour Practice
HEABC’s unfair labour practice has numerous adverse consequences.
HEABC and BCNU appear to have colluded against nurses.
Nurses are not fairly represented, as detailed in the post: BC Nurses’ Union Has Substantially Ceased to Represent Its Members.
BCNU may have breached its duty of care towards retired nurses.
BCNU’s Not-For-Profit status becomes questionable.
The validity of the collective agreement between HEABC and BCNU is questionable if the presumption that they bargained in good faith can be successfully challenged.
The Collusion of HEABC and BCNU’s Leadership Against Nurses
The close parent-subsidiary relationship between the HEABC and the BCNU suggests a strong likelihood of collusion between the two entities.
As the BCNU effectively operates as a subsidiary of HEABC, the union's motive for not distributing the RBP Fund becomes clear. Distributing the $499.5 million RBP Fund to retirees could have prompted other public sector unions to demand similar treatment during their contract negotiations. HEABC's involvement in numerous public sector union collective agreements, beyond just the BCNU, made this outcome undesirable.
After 15 years of failing to distribute the RBP fund, the BCNU's actions suggest either incredible incompetence or deliberate collusion with HEABC to withhold actuarial analysis and the development of a credible, inflation-protected retiree benefit plan.
The COVID-19 vaccination mandates in the Public Health Order did not require the termination of nurses; they only prohibited unvaccinated nurses from working in the workplace. However, it was the policy of the Health Employers Association of BC (HEABC) to terminate about 10% of its staff.23 Unvaccinated staff could have been placed on a leave of absence instead.
On April 1st, 2022, the collective agreement between the BC Nurses' Union (BCNU) and HEABC had expired. BCNU could have chosen to strike and demand the reinstatement of terminated nurses, but they did not do so.
This is significant because healthcare accounts for about 40% of the provincial expenses4, and public healthcare cannot function without nurses. A nurses' strike would have forced HEABC to repeal the COVID-19 vaccination mandates, dealing a humiliating blow to the credibility of the BC Government and Provincial Health Officer Dr. Bonnie Henry.
The collusion between HEABC and BCNU leadership deprives the union of autonomy over its strategic and operational decisions, preventing it from fairly representing its members or negotiating in good faith. This collusion ultimately leads to the deception of BC nurses.
Deceiving and Betraying the Nurses
Year after year, the BCNU has colluded with the HEABC, deceiving nurses. They falsely tout the RBP Fund as a bargaining victory and a boost to member benefits, shamelessly parading this claim at their annual convention and in their shoddy annual reports. However, the financing of RBP Fund is merely an unenforceable courtesy of the HEABC, and the BCNU is under no obligation to pursue its collection or find alternative funding sources. This deceit perpetuates the illusion that the BCNU's collective bargaining is effective and conducted in good faith.
As shown in previous posts, a 2018 email briefing to BC Health Minister Dix revealed that the RBP was not being used as intended.56 The RBP union bribery scheme is only getting worse - starting April 1st, 2024, the LPNs workforce was added to the scheme, which previously only covered RNs.
If the HEABC and BCNU truly intended to provide inflation protection benefits to retirees, there wouldn't be such a massive accumulation of public funds after over 15 years. This failure suggests the RBP fund's true purpose is something other than its stated aim.
The RBP fund is akin to a shackle - a mechanism to tame BC nurses and prevent them from striking to demand better healthcare management practices. In essence, the RBP fund is a carrot that nurses will never get to eat.
With such a substantial amount of money at stake, it's clear that BCNU's executives will manipulate their members to act against their own best interests. In 2022, the nurses' collective agreement expired. They should have gone on strike to end the COVID-19 vaccination mandates, rehire terminated colleagues, and restore pre-pandemic levels of patient services. Instead, HEABC and BCNU leadership tricked nurses into voting for a new agreement that included a $100 million Nurse Support Fund for mental health services. Moreover, the BCNU has proven incapable of properly distributing a previous $499.5 million fund over 15 years, undermining its credibility in managing this new fund.
The new Nurse Support Fund does not address the root cause of the poor working conditions for nurses - the government's mismanagement of public healthcare. With 50,000 members, this fund amounts to only $2,000 per nurse, demonstrating the HEABC's contempt for nurses. If the BCNU truly prioritized nurses' wellbeing, they would have gone on strike to force reforms to public healthcare management, rather than accept this inadequate "bribe" to secure compliance.
BCNU’s Leadership Failed Duty of Care
Over $616 million in HEABC contributions, including the $499.5 million RBP fund, have not been dispensed to nurses and there is no indication this will change. CPA Canada's publication "Audits of Not-for-Profit Organizations: Risk Assessment under Canadian Auditing Standards" (p. 92) outlines the serious consequences for BCNU of accepting but not using HEABC's RBP Fund contributions.
According to CPA Canada, when BCNU accepted HEABC's RBP Fund contribution and recorded it as Restricted Funds, BCNU entered a duty of care toward retired nurses. As BCNU's Treasurer since 2016, Sharon Sponton is the constant factor in BCNU's failure to distribute the RBP funds to retired nurses.
Thomson Reuters Practical Law explains the Duty of Care in the following way: “A duty recognized by law to take reasonable care to avoid conduct that poses an unreasonable risk of harm to others. The existence of a duty of care is a necessary element of the tort of negligence. Negligence will only be found if the defendant owed the plaintiff a duty of care in the circumstances.” This is a tort law issue.
The RBP Committee, which BCNU Treasurer Sharon Sponton has served on for at least 7 years, has a duty of care to disburse the RBP Fund to retired nurses. To fulfill this duty, the committee should have hired actuaries or pension benefit consultants to develop a fair and credible plan for distributing the funds. By failing to do so, the committee has harmed the retired nurses who were owed these monies.
The RBP Committee's standard of care (reasonable action) toward retired nurses is plainly stated in Section 1.08
In Article 4 – Administration of the RBP
In 2022 and 2023, 9,671 retired nurses, each, received a one-time $500 payment. As of 2023, the Retired Benefit Program (RBP) Fund has a balance of $499.5 million.
Retired nurses may have an average claim of approximately $51,000 against the RBP Fund.
BCNU’s Not-For-Profit Status is Questionable
In 2022 and 2023, BCNU had a net profit of 6 and 17 million, and a nurse membership of 46446 and 48722 respectively. In 2022 and 2023, BCNU had a net profit per nurse of $128 and $349 respectively. That’s a 172% increase in profiteering over their burning-out and poorly represented members.
CPA Canada - A Guide to Financial Statements of Not-for-Profit Organizations QUESTIONS FOR DIRECTORS (p. 67) explains Not-for-Profit organizations:
HEABC contributes resources to BCNU and through its control relationship over BCNU, receives the financial return of evading the consequences of BCNU making different operating and strategic decisions. For example, by controlling BCNU with financial contributions, HEABC does not have to absorb the costs of changing its poor public healthcare management practices.
Outsourcing employee benefits administration to BCNU allows HEABC to reduce its costs for employee benefits compared to handling the administration internally. HEABC takes advantage of BCNU's ineptitude knowing that the contributed funds marked for employee benefits will not be spent and may have to be returned.
BCNU’s financial statements clearly show it’s profiteering over the nurses.tus, as HEABC appears to derive financial returns from its contributions to BCNU.
Conclusion
Based on financial reporting standards, there are strong indications of a controlling parent-subsidiary relationship between HEABC and BCNU. This suggests a potential violation of the BC Labor Relations Code through an Unfair Labor Practice between the two organizations.
HEABC gained control over BCNU by subverting the collective agreement between HEABC and NBA, thus legitimizing money transfers from HEABC to BCNU. Notably, BCNU failed to distribute the $499.5 million RBP fund to retired nurses for over a decade.
HEABC and the BCNU collaborated to take advantage of bureaucratic gridlock. Built into the RBP core funding design, which the BCNU oversees, is essentially a thinly veiled cover for a widespread union bribery scheme.
BCNU’s acceptance of HEABC’s RBP contributions of 1% of nurses' wages enabled collusion between them, deceived the nurses on numerous fronts, nurses are not fairly represented, exposed BCNU’s leadership to a breach of duty of care, substantially eroded the credibility of its Not-For-Profit tax-exempt status.
The core purpose of a union is to represent workers and advocate for fair working conditions, not to become a compliant subsidiary of the employer, condone the employer's reckless policies, or administer employee benefits on the employer's behalf.
The situation with the BC nurses' collective agreement appears to be deeply problematic. It seems the BC Nurses' Union (BCNU) has formed an inappropriate, deceitful alliance with the Health Employers Association of BC (HEABC), effectively betraying the interests of the nurses they represent. The collective agreement should be immediately nullified, and the nurses should be prepared to take strong, immediate action - such as a massive, furious strike - not primarily about money, but to restore common sense and integrity to the management of BC's public healthcare system. The nurses have been mistreated and betrayed by the BCNU leadership for far too long.
No union is innocent. My "union" was pushing the jab back in the day. I was FLOORED and was immediately jostled awake to who was on team humanity... not them thats for sure.
Maybe a moral compass test is required when soliciting union structure to ADVOCATE for its members, not coerce and vilify.
Exactly the kind of greedy corruption you'd expect. Hope the retired nurses organize and get repercussions.