Transportation Minister Todd Stone says the provincial government is 鈥済oing to do everything that we possibly can to apply 鈥� downward pressure鈥� on basic car-insurance rates, which will soon see an increase of between four and seven per cent.
It鈥檚 hard to know if he said it with a straight face, as the remark was made during a radio interview. We would take him more seriously if that 鈥渄ownward pressure鈥� included reversing the government鈥檚 plan to take $150 million a year for the next three years from the Insurance Corp. of sa国际传媒
The corporation will submit its application for a basic rate increase to the sa国际传媒 Utilities Commission by Aug. 31. The higher rates will take effect on Nov. 1. Stone said the corporation can seek an increase of between four and seven per cent.
The basic insurance rate was raised 5.5 per cent last year, prompting stern words from Stone.
鈥淚鈥檓 actually disappointed that the proposed basic-rate increase for this coming year couldn鈥檛 be lower than 5.5 per cent,鈥� Stone said when that rate increase was announced.
He sounds a bit like Capt. Louis Renault in the 1942 movie Casablanca, who says: 鈥淚鈥檓 shocked, shocked to find that gambling is going on in here!鈥� just as he accepts his 鈥渨innings.鈥�
Although ICBC makes a profit on the optional policies it offers, it lost $256 million in 2015 on its compulsory basic plan. The government approved a one-time transfer of $450 million from the optional side of the business to ease last year鈥檚 rate increase, yet, like Renault in Casablanca, continues to insist on its share of the winnings 鈥� about $500 million over the past three years.
The publicly owned ICBC was formed to level the insurance playing field for sa国际传媒 consumers. At one point, ICBC had accumulated a surplus, and suggested to the government it give the money back to the people in the form of rebates to good drivers.
But the sa国际传媒 Liberal cabinet ministers gasped at that heresy and decided instead that the excess money would be better used elsewhere. In 2010, the legislature passed a bill giving the cabinet power to move this 鈥渆xcess capital鈥� from ICBC into government coffers.
It has continued to siphon money from ICBC into general revenues to finance areas such as health care and education. It justifies this practice with the official government mantra that shareholders should benefit from profits, and all British Columbians, not just ICBC customers, are the shareholders, so all should benefit.
That鈥檚 the same tune sung when justifying taking 鈥渄ividends鈥� from sa国际传媒 Hydro, but that melody is a little off-key, given that sa国际传媒 Hydro鈥檚 profits were manufactured, not real, and the utility had to borrow to pay the government its share.
Prodded by a severe scolding from former auditor general John Doyle, the government admitted the error of its ways and has promised to wean itself off faux Hydro dividends, starting in 2018.
It should do the same with ICBC. The corporation was not formed to finance government programs, but to provide a service to British Columbians. It should pay for itself, with room enough to accumulate surpluses to cushion rate increases when losses exceed premiums.
The sa国际传媒 Liberals are fond of singing their own praises about not raising taxes, but that鈥檚 just an illusion when insurance and hydro rates rise while the government siphons off money from the Crown corporations involved. The illusion wears especially thin when the provincial taxes collected on insurance premiums and Hydro bills are factored in.
The government would sound a little more sincere about applying downward pressure to insurance rates if it stopped taking its cut.
