NDP fac­ing Crown corp. chaos

The Prince George Citizen - - FRONT PAGE -

There was an eye-catch­ing de­vel­op­ment Wed­nes­day in one of the twin-bill Crown cor­po­ra­tion hor­ror shows that the NDP gov­ern­ment is deal­ing with, as cabi­net agreed to freeze B.C. Hy­dro bills for one year. A three per cent in­crease set for next spring is can­celled (sub­ject to B.C. Util­i­ties Com­mis­sion ap­proval), at a cost in lost rev­enue of $150 mil­lion. It’s not clear where the money will be made up, as the util­ity has maxed out most of its rev­enue av­enues.

The freeze was an­nounced with due fan­fare. Mean­while, in the of­fBroad­way por­tion of pro­ceed­ings – de­bate on the at­tor­ney gen­eral’s bud­get – the ICBC thriller was play­ing out. And the plot twists there don’t show any sud­den mag­i­cal good-news an­nounce­ments com­ing any time soon.

Here’s a brief syn­op­sis of At­tor­ney Gen­eral David Eby’s story line. (Spoiler Alert: It ends badly.)

“Enor­mous multi-hun­dred-mil­lion-dol­lar deficits on an an­nual ba­sis… should have been dealt with a while ago… a fi­nan­cial cri­sis… It des­per­ately could ben­e­fit from rev­enue re­serves that are no longer there… Dif­fi­cult con­ver­sa­tions needed to take place… They’re not com­fort­able con­ver­sa­tions… The sys­tem as it stands is not sus­tain­able. ”

There was one glim­mer of good news in over an hour of mor­bid de­bate about what wretched fi­nan­cial shape ICBC is in. Eby said the gov­ern­ment is not go­ing to al­low the 20 to 30 per cent rate hikes that would be needed to main­tain the cur­rent sys­tem.

But that’s a bit of over­selling, in terms of paint­ing the worst pic­ture imag­in­able, then re­as­sur­ing ev­ery­one it won’t come to pass. Even a sched­ule of 10 or 15 per cent rate hikes would be pro­foundly bad news, and it’s go­ing to take a sharp course change to en­sure that won’t come to pass. Eby said it’s well on the way. “We are look­ing at dra­matic re­forms to ICBC to get them back on fi­nan­cial track.”

Among the ideas are cap­ping the amount paid out for rel­a­tively mi­nor in­juries. It was rec­om­mended by an in­de­pen­dent re­view the pre­vi­ous gov­ern­ment com­mis­sioned, and Eby again con­firmed he’s in­ter­ested.

“We’re look­ing at op­tions like that.”

He also cited a pi­lot project us­ing “tele­met­ric tech­nol­ogy” to drive down costs by mon­i­tor­ing ve­hi­cle per­for­mance – sud­den brak­ing, ac­cel­er­a­tion and sharp turns, etc.

“I look very much for­ward to rolling out those kinds of ini­tia­tives.”

Also on the ta­ble is the idea of in­cen­tives to buy newer cars with bet­ter crash-avoid­ance tech­nol­ogy, to re­duce dam­age claims.

They’re also in­ter­ested in hir­ing more front-line staff to han­dle claims. Eby said a purge by the Lib­er­als in 2012 amounted to a “dec­i­ma­tion” and is part of the prob­lem. Cus­tomers who couldn’t get claims han­dled to their lik­ing hired lawyers, which com­pounded the costs.

“It’s crit­i­cally im­por­tant that Bri­tish Columbians, when they’re in an ac­ci­dent and call ICBC, that they can get a fair res­o­lu­tion of their dis­pute without hav­ing to hire a lawyer.”

There’s also a hard look com­ing at why it’s so ex­pen­sive to fix crashed ve­hi­cles. Au­to­body and glass firms have been asked for ideas to drive down costs, which is go­ing to prompt a fe­ro­cious ar­gu­ment by all con­cerned.

There were two ver­sions of the story that led to the cur­rent mess.

B.C. Lib­eral MLA John Yap said the pre­vi­ous gov­ern­ment worked just as hard to mit­i­gate rate pres­sures. “There are a num­ber of chal­lenges we tried to ad­dress.” Em­pha­sis on “tried.” Eby said the pre­vi­ous Lib­eral gov­ern­ment raided re­serve funds needed to sta­bi­lize claims costs to the tune of $1 bil­lion and tried to cover it all up.

Pro­jec­tions prior to the elec­tion were for an $11-mil­lion loss, but it came in at $900 mil­lion, “90 times higher than what was avail­able to the pub­lic be­fore the elec­tion,” he said.

He said the eight per cent hike that took ef­fect last week was ap­proved “grudg­ingly,” but that’s “nowhere near what it should have been.”

Yet an­other in­de­pen­dent con­sult­ing firm has been hired – the sec­ond in a year – to come up with the promised drama.


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