Teamsters Canada Rail Conference

British Columbia taxpayers paid BC Rail's two top executives a total of more than $630,000 to leave the company when the organization was brought back under government control last year.

Figures released by the government Tuesday show the province paid former BC Rail president and CEO Kevin Mahoney $392,333 in severance when BC Rail was dissolved, along with an extra $11,899 to cover his unused vacation time.

Government also paid executive vice-president of real estate John Lusney $203,033 in severance, along with $23,355 in unused vacation.

The two have helped lead the organization since the publicly owned railway was sold for $1 billion to CN Rail in a deal completed in 2004.

Their main responsibilies have included managing a 40-kilometre long spur line to Roberts Bank, handling the company's real estate portfolio and managing a long-term lease with CN Rail.

On Tuesday, Transportation Ministry spokeswoman Liz Bicknell said the executive payments were part of a transition designed to reduce administrative costs and ensure maximum value for taxpayers.

"Since the rail was transferred directly into the ministry there have been benefits of that transaction. Obviously, we have direct control now of the [British Columbia Railway Co.] business, which is vital to opening up the Asia Pacific region," she said. "There's a cost-saving as well of $5 million per year by 2014, and it gives us greater flexibility with respect to the use of the assets," Bicknell added, noting the severance was paid according to contractual obligations.

New Democratic Party finance critic Bruce Ralston said: "The BC Rail story is a story of deceit and corruption and a colossal waste of government resources all around.

"This is the tag end of that story but there's no doubt it reflects the view of the government that people at the top end should get big increases and people at the middle and the bottom end should take no increases," he added. "That's been their philosophy, that's been their policy and this really reflects the results of that."

Tuesday's listing of public sector compensation, required under the Public Sector Employers Act, also confirmed severance payments to members of former premier Gordon Campbell's senior staff who were let go when Campbell left office.

Government has already disclosed that $2.4 million in severance packages went to 13 bureaucrats at the time Premier Christy Clark took power in March.

Tuesday's numbers show the onetime severance payouts to these senior employees shot two of Campbell's closest advisers into an elite group of last year's top public sector wage earners.

Allan Seckel, Campbell's former deputy minister and former head of the public service, took home $923,907 in 2010-11, an amount that includes an almost $549,776 severance package.

This made Seckel the second-highest paid public servant for 2010-11, according to the list released Tuesday.

Immediately behind Seckel on that list was Martyn Brown, Campbell's longtime chief of staff.

Brown was shuffled into another job before Campbell left, but was let go once Clark took office. Brown took home $653,175.92 last year, including $416,191 in severance.

On Tuesday, Ralston said the payouts support an argument for government to consider fixed-term contracts for executives.

"When you hire people on indefinite term contracts then whenever you let them go you have to pay severance," he said, adding there are many situations where fixed-term contracts ranging from three to five years could be appropriate for public sector executives.

Others on the list of top paid public sector executives released Tuesday include: University of B.C. president Stephen Toope, who made $579,332; T.M. Bechard, managing director of Powerex, who made $1.01 million; and Insurance Corp. of B.C. CEO Jon Schubert, who took home $522,178.