ATTORNEY General David Eby on Tuesday announced a 6.4% basic-rate increase this year.
He said that this is lower than the 20% rate hike that was recommended by the report commissioned by the previous government and released in July 2017.
The government is limiting ICBC rate increases for drivers, while embarking on a multi-year plan to fix the public insurer’s financial crisis, he added.
The overall optional rate will be increased by 3.1% in the first quarter with subsequent quarterly increases of 2.2%, to a maximum of 9.6%.
Individual policy rates will depend on the age of the vehicle, value and use of a vehicle, and where it is being driven.
For an average driver, this is an annual blended increase between basic and optional of 8%, or $130.
Immediate measures include an operational audit of ICBC with a goal of protecting the interests of B.C. drivers moving forward, rolling out 24-hour red-light cameras at high-collision intersections, and a pilot program of new technologies to eliminate distracted driving among high-risk groups.
ICBC had their largest financial loss in the organization’s history last year, losing more than half-a-billion dollars in 12 months.
“Drastic action is needed to fix ICBC’s devastating financial crisis, but B.C. drivers should not be forced to pay 20% basic rate hikes today because of mismanagement that goes back years,” Eby said.
Eby noted that legislation passed in 2010 allowed government to take unprecedented levels of cash out of ICBC. After that regulation was introduced, $1.2 billion was removed from ICBC and put into government’s general revenue.
“It’s unacceptable for government to treat ICBC like an ATM machine – and it cost B.C. drivers more than a billion dollars,” Eby said. “Our priority is to make sure that affordability for good drivers always comes first.”
“Our commitment to British Columbians is to make life more affordable for them – forcing 20% rate increases on drivers is a non-starter,” Eby said. “Our government is working overtime to clean up the mess we inherited in a way that minimizes impacts on drivers.”
In the short term, the government will move forward with a suite of actions to improve ICBC’s operations and reduce accident rates. These include:
- Launching an operational audit of the Crown corporation, the goal of which is to make sure this type of mismanagement can never happen again;
- Moving forward with a pilot project to evaluate distracted driving reduction technology;
- Activating red-light cameras 24 hours a day, seven days a week, up from the current six hours per day;
- Increasing public awareness of the risks of distracted driving through a new advertising campaign; and
- Introducing a dangerous roads initiative to identify and rapidly retrofit infrastructure, regulations and signage at dangerous roads and intersections.
THE Canadian Taxpayers Federation (CTF) called on the government to end ICBC’s monopoly and open it up to private competition to reduce rates.
“We need to perform emergency surgery on ICBC, not slap on these band aid solutions of yearly rate increases with no end in sight,” said CTF BC Director Kris Sims. “Let’s open ICBC to competition so drivers in BC can actually shop for their best rates and not be forced into these sky-high premiums from a government controlled monopoly that is politically manipulated.”
BC drivers pay for the second highest auto insurance rates in Canada – higher than in neighbouring Alberta. Further, between 2011 and 2015, BC had the second highest percentage increase in rates, only behind Saskatchewan.
The CTF noted that it recently released an in-depth report examining auto insurance rates across the country and it has offered a solution to the government monopoly of ICBC: mutualize it and make it function like Mountain Equipment Co-op or VanCity. Take away the ability for governments to torque the corporation and let drivers in BC make their own decisions based on their own driving needs.
ANDREW Weaver, Leader of the B.C. Green caucus, said: “We already have an evidence-based, taxpayer-funded report with proposals for reforms. While I am glad that the government has adopted the Ernst and Young report’s recommendation to turn on red light cameras, with ICBC in such a perilous financial situation, the time to implement changes is now.
“Furthermore, it is essential that we not take any options that would reduce rates off the table. The current system is overly litigious and adversarial. Payouts for minor bodily injuries have increased 365% since 2000. Every other public insurance system in Canada either limits certain types of claims or operates as a no-fault model. Option 4 in the Ernst and Young report projected that such a system would reduce vehicle premiums by $630, or 13.5%, by 2019.
“I concur with the Attorney General’s statement that ICBC’s abysmal financial standing is due to the unwillingness of the previous government to make tough choices. With this new government, there is an opportunity to do things differently. As the business audit of ICBC proceeds, the B.C. Green caucus will advocate for bold, evidence-based solutions that will ensure the best possible outcome for B.C. ratepayers.”