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

Rikhi family donates $60,000 to Penticton Regional Hospital expansion

Donation made in memory of Raksha Rikhi, a nurse from Summerland

South Okanagan RCMP ramping up targeted CounterAttack enforcement

12 impaired drivers were caught by RCMP on Dec. 1, assisted by South Okanagan Traffic Service

Bobsleigh on display in Summerland

Used sleigh set up in honour of Olympic gold medal athlete Justin Kripps

Penticton RCMP want you to Cram the Kennel

RCMP officers, volunteers will be filling kennels with food and pet supplies donations

Summerland utility rates to increase

Water and sewer rates to rise five per cent; electrical increase is two per cent

VIDEO: Close encounter with a whale near Canada-U.S border

Ron Gillies had his camera ready when a whale appeared Dec. 7

Trump’s willingness to intervene in Meng detention roils Canada’s justification

The International Crisis Group said Tuesday, Dec. 11 it’s aware of reports that its North East Asia senior adviser Michael Kovrig has been detained.

Scientist awarded $100K for work on Arctic contaminants that led to ban

Derek Muir has received the $100,000 Weston Family Prize for his research that showed those carcinogens were able to move into the Arctic.

Another 20 to 30 cm of snow expected on Coquihalla

Environment Canada issued a weather statement this morning

Manhunt continues for France shooter

Suspected gunman named, had long police record

‘Jurassic Park,’ ‘Shining’ added to National Film Registry

“These cinematic treasures must be protected because they document our history, culture, hopes and dreams.”

B.C. Lions hire DeVone Claybrooks as head coach

Former Stampeders DC succeeds CFL legend Wally Buono

France shooting: 2 dead, several wounded in Strasbourg

A world-famous Christmas market was put on lock down on Tuesday

Most Read