ICBC expects to shovel nearly half a billion dollars in profits into provincial government coffers over the next three years, according to budget documents.
Although the public auto insurer intends to raise basic insurance rates 11 per cent, its service plan shows it will also turn over $181 million in profits to the government in 2012, $165 million in 2013 and $151 million in 2014.
That money – $497 million – is considered excess to ICBC’s capital requirements on the optional insurance side of its business and therefore unrelated to the need to jack basic rates to keep pace with rising claim costs.
Add in transfers in 2010 and 2011 and the province will have taken nearly $1.2 billion out of ICBC by 2014.
Critics argue the money should be returned to ratepayers.
“They’ve created pools of money that they can extract at will,” said Bruce Cran, president of the Consumers Association of Canada. “It was never meant to be this way.”
The planned increase on basic rates would be partly offset by a premium cut on optional insurance, resulting in a net increase of $27 a year for a typical customer.
Conservative leader John Cummins called the hike a “stealth tax” on motorists in light of the flow of profits to Victoria.
Jordan Bateman, B.C. director of the Canadian Taxpayers Federation, said it’s unfair that taxpayers in general benefit from ICBC charging ratepayers too much.
Bateman said he would prefer to see more competition for car insurance, provided it is regulated.
Bateman said the province is also relying too heavily on the cash it takes from B.C. Hydro and from gambling profits of the B.C. Lottery Corp.
“The government has not been able to wean itself off of these Crown corporation revenues,” he said.