CPSBC investments, fees, and impacts on members. College replies

I write in response to a recent letter submitted by Dr Kevin Wade regarding the College’s finances and application and licensure fees. First, I would like to apologize for the delay in Dr Wade’s professional medical corporation (PMC) approval process. The College acknowledges that the PMC program has experienced serious backlogs in the past, and we are actively working to address these delays. I am pleased to report that our average PMC approval time has dropped by more than 50% in 2022, and we are now processing applications within 2 weeks from the date of receipt.

I would also like to assure Dr Wade and all College registrants that the Board takes its fiduciary responsibility very seriously. Just this year, the Board reviewed the College’s financial reserves policy with other medical regulatory authorities (MRAs) across Canada and our auditors. The Board’s policy is to have 90% of annual operating expenses in reserves. The College’s budget for 2022–23 is $38.2 million, so the $32.5 million that Dr Wade refers to comprises 85% of that amount. The Board has worked over the past 10 years to build financial reserves at a rate of 5% per year. Our peers generally have between 6 and 18 months’ operating expenses in reserves.

The purpose of the contingency reserve, a so-called rainy-day fund, is to ensure that the College has sufficient financial resources to continue operations in the event of a significant event—for example, legislative changes, natural or economic disasters, or a pandemic. We are fortunate that the recent COVID-19 pandemic had only a minor effect on the College’s finances. Had we experienced an extreme event such as a major earthquake that rendered the College’s offices unusable, it would have been necessary to employ the existing reserve balance.

The College’s investments are actively managed by TD Wealth, which was selected through an extensive request for proposal process. Long-term investments are invested approximately 60% in equities and 40% in fixed investments. In 2021, the College shifted to a socially responsible investment portfolio. Short-term operating funds are invested entirely in fixed investments, such as cash, GICs, and bonds funds. While 2022 has been a difficult year for the College’s investments (−7.3%)—as it has been for all institutional investors—its long-term rate of return is > 5%.

The College’s financial reserves help to keep registrant fees as low as possible to fund its operations and administrative obligations. Investment income from these reserves is projected to be approximately $1.5 million in 2023, which allows us to charge the second-lowest fees of all MRAs while operating in one of the most expensive jurisdictions. The Table shows annual licensure fees charged by MRAs across Canada in 2022.

The College is also required to administer one of the most complicated legislative frameworks in the country and serves registrants by offering a medical library; both have associated costs.

Dr Wade also refers to the $1290 application fee—a combination of the credential analysis and registration fee of $640, plus the $650 preliminary qualification of licensure fee. The registration fee ranks below the midpoint of other MRAs across Canada, and the preliminary qualification of licensure fee is applied only in cases that require additional review by the College’s registration department.

I hope that in providing this level of detail I have addressed Dr Wade’s concerns. The College is committed to transparency and accountability and always welcomes inquiries from registrants about how it conducts its regulatory business to ensure British Columbians receive safe and competent medical care.
—Heidi M. Oetter, MD
Registrar and CEO, College of Physicians and Surgeons of BC

This letter was submitted in response to “CPSBC investments, fees, and impacts on members.”

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