The Alberta government has launched a review of auto insurance in the province, saying it wants to ensure the industry can remain viable and that drivers can get affordable coverage.
Albertans pay some of the highest rates in Canada but have trouble getting critical protection, such as coverage for comprehensive or collision, Finance Minister Travis Toews said Wednesday.
But a five-per-cent annual cap on rate increases, introduced by the former NDP government and since abandoned by the United Conservative Party, is not coming back, he said.
“The rate cap simply put a Band-Aid on a wound that was festering,” Toews said at the legislature Wednesday. “In the intermediate and long term it was no solution, and even in the short term it made a bad situation worse.”
Auto insurance rates in Alberta have been rising sharply over the last five years. The trend prompted the NDP government to cap overall rate increases at five per cent annually for each insurer, starting in 2017.
The UCP government did not renew the cap in August, and some drivers have since reported getting notices of steep increases of 12 per cent or more.
Insurers have said that under the cap they were losing money in Alberta, given more payouts for car theft, injury claims, repairs and catastrophes such as the 2016 Fort McMurray wildfire.
Toews said the cap forced insurers to seek savings at the expense of drivers by, in some cases, refusing to offer critical protections.
In other cases, some clients were still hit with steep increases as long as the overall hike by the insurer to all Alberta clients remained at five per cent.
“Under the cap, we had insurers getting squeezed … so Albertans were finding themselves with fewer and fewer insurance options,” said Toews.
“We ultimately need to deal with the challenges that are leading to increased premiums … and present a reformed insurance system in this province that can serve Albertans well.”
A three-member committee has been asked to find solutions that work for all parties within the existing privately delivered system, Toews said.
In an interview with CBC News, Premier Jason Kenney said the government will use the “next six months to address out-of-control increases on personal injury awards.” Those payouts contribute to driving up costs, which are then paid by customers through their premiums, he said.
Asked about a cap, Kenney said former premier Ralph Klein put one in place in 2004.
“We’re going to look at how to have a more effective control,” Kenney said. “Something like a no-fault insurance system, which maintains a reasonable control on the awards.”
In 2004, the Klein government put a $4,000 cap on soft-tissue injuries. In the four years that followed, auto insurance premiums dropped by about 18 per cent.
Back then, Alberta’s auto insurance system was the envy of all the systems in Canada, said Celyeste Power, western vice-president of the Insurance Bureau of Canada.
Court challenges in 2012 and 2015 found some “vulnerabilities” in the definition of minor injury, she said.
“What we’ve seen from that is a huge increase in legal representation and lawsuits around that to kind of push things outside of the cap,” Power said. “Fifty-three per cent of the costs that have increased over the past five years have been associated with that.”
As a result, there are injuries considered minor in other jurisdictions that are not in Alberta. A common example of that is TMJ (temporomandibular joint) disorders, which affect the jaw muscle, she said.
‘We need to get this system fixed’
While fixing the definition of minor injury is important, Power said, there also needs to be adequate care in place to treat people who are injured in automobile collisions.
“Even if the minor injury cap is meant to capture more of these injuries, if it is a serious injury … if you have chronic pain for six months plus, and that’s considered serious, then of course you would be able to get the care and support you need,” Power said.
Clarifying the definition would likely offer stability to premium rates, she said.
“We need to get this system fixed for the three million drivers who count on it,” Power said. Drivers are “sick of increases in their auto insurance” and want more control over what they’re paying for and what they’re buying.
The committee will consult with consumers, industry stakeholders, medical experts and the legal profession.
The committee includes chair Chris Daniel, who is in his second term as the consumer representative on the Automobile Insurance Rate Board; Shelley Miller, a lawyer with expertise in auto insurance reform; and Dr. Larry Ohlhauser, who has served as medical adviser to the superintendent of insurance for the past 12 years.
The committee will report back to government in the spring 2020 legislative session.
NDP’s Service Alberta critic weighs in
Jon Carson, the NDP’s Service Alberta critic, wants to see what comes of the panel but said he is worried that Albertans will continue to pay more for auto insurance in the meantime.
“The fact is, we’re already several months past when this government said they were going to take action, and nothing has been done up to this point,” Carson said.
“So, we’re very concerned that now we have to wait several more months before any decision comes forward, whether it’s actually protecting Albertans in their pocketbooks or not.”
Carson said he disagreed with the finance minister’s assessment that the five-per-cent rate increase cap introduced by the previous NDP government “made a bad situation worse.”
“What we would have liked to see is that cap to stay in place, and then we can move forward with this committee discussion,” Carson said. “But to preemptively get rid of that cap and then say we’re going to come up with a solution. They’ve made a committee now to cover up the fact that they are the ones who’ve affected consumers so negatively at this point.”
With files from Canadian Press
COVID-19: Ontario case total dips below 2,500; Big-box blitz finds compliance wanting – Ottawa Citizen
Ontario reported 2,578 new cases of COVID-19 on Monday, the lowest this daily total has been since Jan. 1.
The seven-day average for new cases in Ontario is now 3,035, and has declined every day in the last week from the record-high average of 3,555 reported Jan. 11.
There are 1,571 people hospitalized with COVID-19 in Ontario (an increase of one from the previous day), including 394 people in ICU (down one), with 303 on ventilators.
Twenty-four additional COVID-19 deaths were reported by the province.
Monday’s new case total includes 92 in Ottawa, according to Public Health Ontario. The confirmed case total rose by 36 in Eastern Ontario, four in Hastings Prince Edward, two in Renfrew County and District and one in Leeds, Grenville and Lanark. There was no change to the pandemic case total in Kingston, Frontenac and Lennox and Addington.
In terms of active cases, Peel Region is currently the hardest-hit Ontario health unit with 416 cases per 100,000 people. It’s followed by Windsor-Essex (399), Niagara Region (328), Toronto (319) and Middlesex-London (234).
Unifor approves $1 billion General Motors deal to build electric vans in Ontario – Yahoo Canada Finance
The New Brunswick Teachers’ Federation says it does not support keeping schools open during red phase, a change that took both teachers and district officials by surprise. The federation, which represents both anglophone and francophone teachers, said the province did not consult them before changing the rules. “This government’s decision was communicated to us only a few minutes before today’s press conference,” said the federation in a letter released yesterday. Minister of Education Dominic Cardy and Dr, Jennifer Russell, the province’s chief medical officer of health, announced Sunday 36 new cases of COVID-19, a new single-day record. The cases include 24 in the Edmundston and Grand Falls region, or Zone 4, which is moving to the red phase. At the same news conference, Cardy said schools in Zone 4 will stay open under new phase-red guidelines. The guidelines previously said if a zone moved to the red phase, all non-essential businesses and schools must close. Cardy said students will be safe at school, even during phase red. The federation said it plans to address its concerns with Cardy, including asking how suddenly changing the rules could help “foster a climate of stability,” and how students, teachers and staff will be kept safe. Francophone North-West School District superintendent Luc Caron held a media conference Monday afternoon supporting the government’s decision. “[If] schools are open that means schools are safe and that is Public Health’s message that they’re sending out,” he said. “We will continue to do our best to give the kids the best education, best quality of service possible.” Caron said the new rules came as a surprise to the district as well. He said staff have been working on red-phase plans for months, but had to pivot when they learned that they will remain open in red. Caron said if parents want to keep their kids at home because they don’t feel safe, they are free to do that. But if they do, “they become the teacher.” He said he hopes parents will understand the district is keeping the students and staff safe by following Public Health guidelines of cleaning and masking. He said the district will step up active screening of school personnel, and screen employees on a daily basis. Extracurricular activities will be cancelled, and if employees or students experience only one symptom they are asked to stay home and get tested, he said. “We encourage our parents to take a look on our health measures in place and I hope they realize that means we are strict and our measures are safe,” he said. “We would invite them to bring back their kids to school.”
GM investing $800M to build BrightDrop electric van in Canada plant – Fox Business
General Motors has earmarked approximately $800 million to convert its CAMI Assembly plant in Ontario, Canada, into an electric vehicle manufacturing facility.
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The factory, which currently produces the Chevrolet Equinox, will begin building electric vans for GM’s new BrightDrop division by the end of 2021, with the full transformation to electric vehicles scheduled for completion within two years.
GM also builds the Equinox in Mexico for U.S. sale, but has not announced its plans for making up for the lost Canadian production capacity.
GM last week announced the formation of the BrightDrop brand during a CES presentation when it revealed the purpose-built EV600 commercial van. The EV600 will use the automaker’s new Ultium electric vehicle platform and be followed by other models.
FedEx was announced as the first customer for the EV600, which will have a range of 250 miles per charge and become widely available in 2022 at a yet to be announced price.
CAMI is the fourth factory being converted electric vehicle production that GM has announced in recent weeks, following its Spring Hill. Tenn., Orion Township, Mich., and Detroit-Hamtramck facilities, the last of which has been renamed Factory ZERO.
COVID-19: Ontario case total dips below 2,500; Big-box blitz finds compliance wanting – Ottawa Citizen
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