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

Santa joins kids for Christmas in the Forest in Chilliwack

Annual holiday party and fundraiser helps students at Leap For Joy Open Air Learning

Mike McCardell in town for book-signing at Coles in Chilliwack

His newest book, Shoelaces Are Hard: And Other Thoughtful Scribbles, is his 12th to date

Photos: The Contenders rock the Blue Moose Coffee Shop Friday

Valdy and Gary Fjellgaard came together as (The) Contenders to play music… Continue reading

Birds from Raptors Ridge pay a visit to Chilliwack

Up-close viewings, nature walks, and youth owl classes all part of visits this month to Chilliwack

Ask the Coach: Chilliwack Chiefs bench boss Brian Maloney talks about referees

Ask the Coach is a bi-weekly column where Brian Maloney answers questions from the fans

VIDEO: Highway overpass protest against United Nations ‘compact’ on immigration

Demonstrators say Canada will have less control over who is allowed in the country

In Canada, the term ‘nationalism’ doesn’t seem to have a bad rap. Here’s why

Data suggest that Canadians don’t see the concept of nationalism the way people do in the United States

Small quake recorded west of Vancouver Island

No injuries or tsunami warning after 5.4 rumble felt some 400 kilometres from Victoria

B.C. suspends Chinese portion of Asian forestry trade mission due to Huawei arrest

Huawei’s chief financial officer Meng Wanzhou was detained at the request of U.S. in Vancouver

Canadians spent $1.7 billion dollars online in December 2017

Online retail sales accounted for 3.4 per cent of total retail sales

2-year investigations nets $900,000 in refunds for payday loan customers

Consumer Protection BC says selling practices were ‘aggressive and deceptive’

China: Canada’s detention of Huawei exec ‘vile in nature’

Huawei is the biggest global supplier of network gear for phone and internet company

1 of 2 B.C. men wanted in connection to home invasion, explosives in custody

Cameron Cole is charged with two counts of possessing an improvised explosive device

Judge rules private landowners can’t block public access to B.C. lake

The Nicola Valley ranch’s position was that it owned Stoney Lake and Minnie Lake

Most Read