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

Tommy Chong says cannabis legalization makes him proud to be a Canadian

Legendary marijuana advocate and comedian celebrates cultural milestone at Kelowna event

Black trucks figure prominently in Shuswap thefts

Chase RCMP investigating stolen vehicles from several communities

Silverbacks head coach Scott Atkinson talks injuries, upcoming games

Team is feeling confident ahead of matches against Alberni Valley, Vernon

Former Vernon man guilty of Japanese exchange student’s murder

Natsumi Kogawa was found at empty heritage mansion shortly after she was reported missing in 2016

‘Suspicious male’ not a threat, but police appreciate report

Salmon RCMP commend girls and bystanders on their vigilance

Cough cough: Kelowna MLA gets flu shot to prep for the cold season

Steve Thomson got his flu shot from Lakeside Medicine Centre Friday

B.C. tickets win big in Lotto Max draw

Jackpot carried over; B.C. tickets share Max Millions prizes

Shuswap’s young inchthyologists marvel at fish return

Sorrento Elementary students visit the Salute the Sockeye event at TsĂștswecw Provincial Park.

Celebration salutes 60 years of medical care provided at Salmon Arm hospital

Hospital lauded for continuing advancements in top-notch care by B.C. health minister

Election 2018: Jay Simpson, candidate for Columbia Shuswap Regional District, Area F

One of two candidates vying to represent the North Shuswap provides a bio, talks about the issues.

Election 2018: Will Hansma, candidate for Columbia Shuswap Regional District, Area F

One of two candidates vying to represent North Shuswap provides a bio, talks about the issues.

‘Mom, I’m in trouble:’ Canadian faces 10 years for alleged graffiti

Brittney Schneider, another tourist caught spraying message on walls of Tha Pae Gate in Thailand

Feds consulting on national anti-racism strategy behind closed doors

Heritage Minister Pablo Rodriguez says people still face systemic racism in some communities

Most Read