Entertainment

Vaughn Palmer: Eby ducks and dives on ICBC file


Attorney General David Eby speaks about changes coming to ICBC during a press conference in the press gallery at Legislature in Victoria, B.C., on Tuesday February 6, 2018.


CHAD HIPOLITO / THE CANADIAN PRESS

VICTORIA — When the New Democrats announced the latest moves on auto insurance last week, they could not have asked for a more wrong-footed response from the B.C. Liberals had they drafted it themselves.

“NDP blames B.C. drivers instead of fixing a broken system,” declared the release from Liberal leader Andrew Wilkinson after the announcement Thursday from Attorney-General and cabinet minister for ICBC David Eby.

This from the leader of a party that had custody of ICBC for 16 years, including many months of evasion on rates and operating losses before the last election.

After that lengthy span of denial and neglect, the Liberals were now demanding to know why the New Democrats hadn’t fixed things already.

Plus there was this: “It’s time for a complete re-work of the auto insurance framework in B.C., and the NDP is not delivering. When we look across North America we see that most other jurisdictions operate without a government-run insurance system.”

Privatization? Odd call again. The Liberals flirted with the notion from the opposition benches in the 1990s. But once in office they chose not to run the political risk and instead kept ICBC mainly public.

Having provided government supporters with a couple of easy targets to shoot at, the Liberals fell silent. Perhaps because of the August holidays, perhaps the realization that for the opposition, there are better openings to come on the auto insurance file.

Eby did his best to frame the announcement as good news. “Government modernizes ICBC rate design to make insurance fairer,” headlined his release followed by “ these changes will benefit an estimated two thirds of ICBC’s customers.”

The purported benefits for the winning two thirds of customers ranged from reductions of “up to $50” for 39 per cent of all drivers, of “between $50 and $100” for 13 per cent, and “more than $100” for 15 per cent.

Rate cuts for two drivers out of three — what was not to like?

But the fine print told a different story, starting with the giveaway phrase that the calculated reductions were “based on today’s rates in the first year of this transition.”

Today’s rates will not be in effect when the new framework kicks in next year. They are expected to increase over all three years of the scheduled transition.

“It may be that the discount some drivers are going to see is wiped out by the rate increase,” as Eby himself had to admit.

Asked twice by Keith Baldrey of Global TV to rule out double-digit rate increases, Eby ducked twice.

“I don’t want to speculate,” he told reporters. “It has to go through ICBC’s internal process as well as the B.C. Utility Commission processes. But we have put the changes in place to keep the increase as low as possible.”

Pressed on the meaning of “as low as possible,” Eby set the bar as high as possible, pledging to avoid a hike of 30 per cent over three years.

But having lost $1.3 billion in the last year, ICBC is on a fast track for a turnaround.

“We’re going to lose money this year. We’re going to lose money next year,” CEO Nicolas Jimenez said last week. “But in year three we’re going to be able to become profitable again.”

Some of that forecast is grounded in the earlier announcement of caps on injury payouts and legal costs. But it probably means a rate increase in the order of 20 per cent over three years, enough to eat up the “reductions” touted in Eby’s disingenuous press release several times over.

The proposed new framework promises lower rates for longer-term safe drivers, those who drive less than 5,000 kilometres a year and vehicles with newfangled emergency braking technology.

But those discounts shrink in comparison to the many grounds for rate surcharges including accumulated penalty points, multiple crashes, and insuring additional drivers on a given vehicle.

ICBC is imposing age discrimination for young drivers without quite admitting it is doing so: “Basic insurance discounts for inexperienced drivers will be adjusted to better reflect their risk.”

Newcomers will be targeted as well: “New residents represent a higher risk for the first few years of driving in a new jurisdiction due to changes in landscape and environmental factors.”

Drivers in congested urban regions and those in places with more dangerous roads (hence higher accident rates) will pay more as well.

“People like to compare insurance rates to Manitoba and Saskatchewan,” as Eby told host Harjinder Thind on CKYE-FM last week “Where there are much smaller populations, where it is very flat and the roads are wide open and you can see for a long distance, it is much safer driving conditions. So you have to consider B.C.’s geography and population.”

All those drivers and many others will pay and pay to get the ICBC books back into the black, though how much they will pay remains to be determined.

The next shoe drops Wednesday when ICBC goes to the B.C. Utilities Commission for approval of the new rate framework. The proposed higher rates themselves will be part of a second submission in December.

The higher rates begin to bite in the new year, by which time we’ll see whether the New Democrats can continue to pin all the blame on the B.C. Liberals or have to start wearing some of it themselves.

vpalmer@postmedia.com

Show More