Fraser Institute study lists bad decisions, failure to act, as ICBC debt mounted

New Democrat government has confirmed the corporation faces a $1.3 billion loss this fiscal year

A study from a Vancouver-based public policy think tank blames what it terms “misguided decisions” and runaway costs for the current financial crisis at the Insurance Corporation of British Columbia.

The Fraser Institute study, authored by John Chant, a professor emeritus of economics at Simon Fraser University, finds the corporation’s problems began years ago and grew steadily worse with government inaction.

The newly elected New Democrat government confirms the corporation faces a $1.3 billion loss this fiscal year and Chant says the public insurer had a $889 million loss last year.

He says the corporation’s basic insurance operation, which has a monopoly over mandatory coverage, suffered persistent losses for years but received infusions of $1.4 billion between 2010 and 2017 from the then-profitable optional insurance side of the business.

The former Liberal government also transferred $1.2 billion to provincial coffers from optional insurance but Chant says when that side of the corporation also began losing money, no action was taken to boost rates or stop the slide.

The corporation’s current financial position is unsustainable, he says, noting rate hikes totalling 44 per cent would have been required between 2015 and 2017 just to offset rising costs.

“Faced with exploding costs, the previous B.C. government had a choice: contain the costs, take the unpopular decision to increase rates substantially, or enact large-scale reform of the basic auto insurance system in the province. In the end, the government chose to do nothing,” Chant says in a news release.

No one from the Liberal Opposition was available to comment on the report.

Chant says the current government deserves credit for acknowledging the problems but the corporation’s role must be rethought and any fix will not be simple, or inexpensive.

“The kind of Band-Aid solutions they’ve used in the past simply won’t be enough to fix its problems moving forward,” he concludes.

The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

Maple Ridge’s tent city evacuation shelter closing

Becomes a night refuge only, then shuts for good March 31

Former Maple Ridge resident in Sonic Boom Music Fest

Aaron Graham will be featured at the upcoming Sonic Boom Music Festival

UPDATE: Styrofoam melting machine the cause of Saturday’s fire in Pitt Meadows

Fire spread quickly to surrounding Styrofoam and lumber

Looking Back: Books and haircuts

What do they have in common?

Bees facing high mortality after long, hard winter

Some Pitt Meadows beekeepers seeing half of their hives die

VIDEO: RCMP ask kids to help name soon-to-be police dogs

13 German shepherd puppies will be born this year

Horvat scores 16 seconds into OT as Canucks beat Blackhawks 3-2

Pettersson sets rookie scoring record for Vancouver

No injuries, pollution in Vancouver Harbour ship collision: Transport Canada

Transportation Safety Board says it has deployed a team of investigators look into the incident

Budget 2019: Five things to watch for in the Liberals’ final fiscal blueprint

Finance Minister Bill Morneau will release the Trudeau government’s final budget on Tuesday

New concussion guidelines launched for Canada’s Olympians, Paralympians

The guidelines will be in effect at this summer’s Pan American, Parapan American Games in Lima, Peru

Accused Surrey transit cop shooter’s bail hearing set for April

Daon Gordon Glasgow, 35, is accused of shooting Transit Police Constable Josh Harms, 27

Alphonso Davies doubtful for Canada game against French Guiana in Vancouver

Canada will be without injured captain Scott Arfield and veteran Will Johnson

Watchdog called after man who yelled racial slurs at B.C. vigil hurt during arrest

BC RCMP say man was ‘acting suspiciously’ at prayer vigil for victims of New Zealand mosque shootings

Most Read