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

Fraser Health launches new drug-use support team to curb overdoses

Nearly 200 people have been killed by illicit drug overdoses in the region so far in 2018

Mission Folk Music Festival opens with a community night

On Friday, July 20, admission to the event is Pay-What-You-Can

Lower Mainland cools down as heat wave lifts

Environment Canada predicts temperatures in the mid to low 20s

Witness douses flames on tree fire in Abbotsford

Incident occurred Tuesday afternoon in Grant Park

Council agrees to pay for fence around Mission Legion

Building has been hit by vandalism and grafitti

Trudeau asks transport minister to tackle Greyhound’s western pullout

Prime Minister Justin Trudeau says he’s asked Transport Minister Marc Garneau to find solutions in Greyhound Canada’s absence.

More than $10,000 in Bitcoin paid in Richmond ransom scam

RCMP say victim transferred cash to Bitcoin ATM after being told partner had been abducted

Hells Angels celebrating 35th anniversary party on Vancouver Island

Additional police resources will be in Nanaimo this weekend as roughly 300 members and hang arounds are expected

New campaign aims to tide food waste at home

About 2.2 million tonnes of edible food is discarded in Canada every year

B.C. couple reunited with dog three years after disappearance

A purebred Pomeranian is back with his parents, likely after years in a puppy mill.

BC Nurses Union calls for decriminalization of opioids

BCNU president wants the federal government to do more to reduce preventable deaths

UPDATED: Divers search for missing swimmer at Buntzen Lake near Coquitlam

A 19-year-old man was reported missing at 4:30 p.m Tuesday

5 to start your day

Campfire ban comes into effect, Rich Coleman backs away from Surrey mayorship and more

Kitten OK after being rescued from underground pipe in B.C.

An adventurous feline has been rescued after getting trapped in an underground pipe in Kamloops, B.C.

Most Read