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

Chilliwack’s Jordyn Huitema wins Sport B.C. award

The honours keep coming for Huitema, who is in the spotlight with Canada’s national soccer squad.

See stunning sights and amazing adventures at mountain film fest in Chilliwack

Discover what’s in our own backyard with the Vancouver International Mountain Film Festival tour

Seven Days in Chilliwack

A list of community events happening in Chilliwack from March 18 to 24

Harrison considers future of memorial bench program

Harrison to keep maintaining bench plaques, council seems to feel new benches could be in the future

The complete history of science in one hour at Chilliwack Cultural Centre

We Now Know is a complete history lesson without the boring stuff

B.C. resident baffled about welcome mat theft

Security footage shows a woman and her dog taking the mat from the property on March 13

Father thanks B.C. Mountie for shooting hoops with kids, ‘changing perspectives’

‘We’re just like everyone else,’ says Surrey officer who stopped to play basketball with kids

2019 BUDGET: As deficit grows, feds spend on job retraining, home incentives

Stronger economy last year delivered unexpected revenue bump of an extra $27.8 billion over six years

Trans Mountain court hearing: B.C. says it won’t reject pipelines without cause

Canada says the proposed amendments to B.C.’s Environmental Management Act must be struck down

Carfentanil found in 15% of overdose deaths in January: B.C. coroner

Carfentanil is 100 times more powerful than illicit fentanyl and used to tranquilize elephants

B.C. father fights for his life after flu turns into paralyzing condition

Reisig has lost all motor skills with the exception of slight head, shoulder and face movements.

B.C. wildfire prevention budget bulked up as dry spring unfolds

Night vision goggles tested for early detection effort

Vernon ordered to reinstate terminated firefighters caught having sex at work

City believes arbitration board erred, exploring options

Most Read