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Alberta committee to review auto insurance, with eye to balancing costs and coverage – CBC.ca

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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.

Finance Minister Travis Toews, at the podium, accompanied by members of the review panel. From left, Shelley Miller, Dr. Larry Ohlhauser and Chris Daniel. (David Bajer/CBC)

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

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RBC warns house price correction could be deepest in decades | CTV News – CTV News Toronto

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A housing correction, which has already led to four consecutive months of price declines in the previously overheated Greater Toronto Area market, could end up becoming “one of the deepest of the past half a century,” a new report from RBC warns.

New data released by the Toronto Regional Real Estate Board (TRREB) last week revealed that the average benchmark price for a home in the GTA fell six per cent month-over-month in July to $1,074,754.

Sales were also down a staggering 47 per cent from July, 2021.

In a report published on Aug. 4, RBC Senior Economist Robert Hogue said recent data from real estate boards underlines that higher interest rates are beginning to take a “huge toll” on the market.

Hogue said that with further hikes to come, prices will likely continue to slide in the coming months.

That prediction, it should be noted, goes against a report from Royal LePage last month which painted a rosier forecast for sellers in which values would more or less holding for the rest of the year following some declines in the second quarter.

“Our expectations for further hikes by the Bank of Canada—another 75 basis points to go in the overnight rate by the fall— will keep chilling the market in the months ahead,” Hogue said. “We expect the downturn to intensify and spread further as buyers take a wait-and-see approach while ascertaining the impact of higher lending rates. Canada’s least affordable markets Vancouver and Toronto, and their surrounding regions, are most at risk in light of their excessively stretched affordability and outsized price gains during the pandemic.”

The Bank of Canada has hiked the overnight lending rate by 225 basis points since March and has warned that further hikes will be necessary given that inflation remains at a near 40-year high.

In his report, Hogue pointed out that the housing correction “now runs far and wide across Canada” but he said that it is particularly pronounced in the costlier markets of Toronto and Vancouver.

In fact, Hogue said that housing resale activity in Toronto is at its slowest pace in 13 years, outside of the early days of the COVID-19 pandemic.

The stockpile of available homes is also up 58 per cent from a year ago, he noted.

“With more options to choose from and higher interest rates shrinking their purchasing budgets, buyers are able to extract meaningful price concessions from sellers,” he said, pointing out that the average price of a home in the GTA is down 13 per cent from March. “We expect buyers to remain on the defensive in the months ahead as they deal with rising interest rates and poor affordability.”

While Hogue did say that condos in the City of Toronto are likely to remain “relatively more resilient” he said that prices elsewhere will continue to fall for the time being, especially in the 905 belt “where property values soared during the pandemic.”

The July data from TRREB suggested that the average price of a home in the GTA was still up one per cent from July, 2021.

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Commuters face GO transit cancellations, possible strike – CityNews

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Canada Revenue Agency plans email blitz to get Canadians to cash outstanding cheques worth $1.4-billion – The Globe and Mail

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The Canada Revenue Agency (CRA) is planning a massive e-mail notification campaign to reach Canadians across the country who have uncashed cheques worth a net $1.4-billion.

The e-mail notifications will target recipients of the Canada child benefit and related provincial and territorial programs, as well as recipients of the GST/HST credits and the Alberta Energy Tax Refund.

The CRA said it plans to send approximately 25,000 e-mails in August, another 25,000 in November and a further 25,000 e-mails by May, 2023.

However, even without receiving an e-mail notification, the agency said a taxpayer can check if they have a cheque by logging into My Account, a secure portal on its website to check if they have an uncashed cheque over a period of six months. It added that representatives can also view uncashed cheques of their clients.

Each year, the CRA said it issues millions of payments to Canadian taxpayers in the form of refund benefits. These payments are issued by either direct deposit or by cheque.

“Over time, payments can remain uncashed for various reasons, such as the taxpayer misplacing the cheque or even a change of address which did not allow for delivery,” the agency said in a statement.

The CRA said since the e-mail notification initiative was first launched in February, 2020, about two million uncashed cheques valued at $802-million were redeemed by May 31, 2022.

The average amount per uncashed cheque is $158 with some of them dating as far back as 1998, the agency said.

As of May, 2022, there were an estimated 8.9 million uncashed cheques with the CRA. In May, 2019, about five million Canadians had an estimated 7.6 million uncashed cheques.

“As government cheques never expire or stale date, the CRA cannot void the original cheque and re-issue a new one unless requested by the taxpayer,” the statement read. “These upcoming e-notifications are to encourage taxpayers to cash any cheques they have in their possession.”

The agency said taxpayers can register for the direct deposit option on its website to receive payments directly into their bank accounts.

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