BC Drivers pay some of the highest car insurance rates in the country while receiving the lowest payouts, and yet somehow ICBC is out of money.
A recent report from Ernst & Young painted a dire picture at the Crown corporation, concluding that rates must increase by 30 per cent by 2019 to cover costs. A separate forecast released last November by ICBC indicated rates would need to increase by 42 per cent over the next five years to make up for expenses.
McCandless pointed to a footnote in the ICBC report that an additional $1.5 billion is required in “capital from other sources” between 2017 and 2020. He calculated the cumulative rate hike to be closer to 117 per cent over four years.
ICBC says the problem stems from an increase in car accidents, other people blame politics.
Eby and other ICBC supporters single out the actions of former Liberal premier Gordon Campbell as marking the beginning of the corporation’s troubles.
Campbell required ICBC to keep much higher amounts of backup capital. The resulting stockpile proved irresistible to politicians in 2010 following the global financial meltdown, critics say, when the government began siphoning hundreds of millions of dollars of “excess capital” almost every year.
In all, the Liberals withdrew $1.2 billion from the lucrative optional side of ICBC’s business, and also transferred $1.4 billion to offset deficits on the compulsory side providing basic coverage beginning in 2012.
“The reason we’re in a bind right now is that there’s no more money left in the optional piggy bank,” said retired civil servant Rick McCandless, who has written extensively on ICBC.
“The music has stopped. You can’t play the game anymore. Somebody has to make some hard decisions. And that somebody is government.”
At least we have affordable housing!
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