Another public consultation? Skepticism grows as Alberta launches survey on auto insurance

After months of pointing at big changes to come, the province says legislation to reform Alberta's auto in‐ surance system could be coming this fall.

In a mandate letter last July, Premier Danielle Smith tasked Minister of Affordabil‐ ity and Utilities Nathan Neu‐ ford with providing shortand long-term recommenda‐ tions to make car insurance more affordable.

Four months later, in a press conference, Smith rolled out some short-term plans, including the introduc‐ tion of a 3.7 per cent rate hike cap on insurance for "good drivers." She also promised long-term reforms were coming in the next year.

"The cost-of-living crisis is‐ n't over just yet. We're look‐ ing at all possibilities to pro‐ vide relief, and auto insur‐ ance is next on our list," Smith said in November, a month before the rate freeze was lifted.

The government has been quiet on the auto insurance front since then - until last week, when it asked Alber‐ tans to join the conversation by filling out an online survey, which is open until June 26.

In the same breath, it re‐ leased two long-awaited studies it commissioned on the feasibility of adopting dif‐ ferent insurance models in Alberta and the economic im‐ pacts of those systems.

So what will this public consultation accomplish, as Alberta drivers wrestle with the second-highest insurance premiums in the country, be‐ hind Ontario?

"We are asking Albertans what changes, if any, they want us to make to the sys‐ tem to achieve long-term re‐ lief rather than short-term measures," said Treasury Board and Finance Minister Nate Horner's press secre‐ tary, Justin Brattinga, in an emailed statement.

"No decisions on auto in‐ surance reform have been made," he said.

An official with the Insur‐ ance Bureau of Canada says this public consultation goes further than knowing whether Albertans want cheaper insurance; it's about gauging what balance drivers want with their coverage.

But some Albertans are doubtful their feedback will be taken into consideration a skepticism a political analyst says is warranted, given the UCP government's history of hearing one thing during public consultations and doing another.

'They don't listen'

Mount Royal University policy studies associate professor Lori Williams says it makes sense for the province to check in with Albertans on a topic that affects them.

But she says the govern‐ ment is likely to face a major problem: some Albertans are very skeptical about public consultations.

"Because despite the fact that 70 per cent of Albertans do not want political parties in municipal elections, they have proceeded with legisla‐ tion to accomplish exactly that, at least in two munici‐ palities in Alberta. And de‐ spite repeated polling and consultations that Albertans do not want a provincial pen‐ sion plan, they've continued to pursue that," said Williams.

"A government that has claimed to consult with Al‐ bertans and to listen to Al‐ bertans has repeatedly failed to do that and actually take an action that's in direct op‐ position to what Albertans have clearly indicated."

Edmontonian Yolanda En‐ gel is one of those skeptics. She strongly opposes nofault insurance - she wants the ability to sue if she gets seriously hurt in an accident.

But even though the province has previously said that's one of the systems it's considering, Engel says she doesn't see any point in fill‐ ing out the survey.

"To me, it's just falling on deaf ears.… They don't listen to anyone's remarks, no mat‐ ter who is giving their opin‐ ion," said Engel.

She says she's been burned in the past with the province's surveys. She was among many others who spoke out against the province's curriculum changes, only to see them go ahead with them anyway.

"They can do whatever they want even though no‐ body else wants what they're testing, so it's very frustrat‐ ing."

Balanced coverage

The bulk of the survey asks Albertans about their thoughts on the province's five core principles guiding this reform: affordability, sta‐ bility, simplicity, care focused and accountability.

It also asks other ques‐ tions, like if you've been in‐ jured in a vehicle accident in the past five years and if you trust your insurer to support you properly if you get hurt.

Aaron Sutherland with the Insurance Bureau of Canada says this consultation is all about which pieces of the in‐ surance puzzle Albertans val‐ ue most.

"Everybody wants more affordable auto insurance, but coverage counts," said Sutherland.

"This consultation really looks at what is the balance that the drivers in Alberta want to see between afford‐ ability, between maintaining and increasing level of care, but also your ability to sue and your ability to hold atfault drivers responsible for collisions."

Martin Halek, associate professor of risk manage‐ ment and insurance at the University of Calgary's Haskayne School of Business, says it's important Alberta drivers know it isn't possible to check all of those boxes there are trade-offs required.

"If nothing else, the survey serves as a refresher course that insurance does‐ n't work in a box where the lowest premium wins kind of thing. That's probably a good thing," said Halek.

"How is it going to be ana‐ lyzed? Will it be used to make better regulatory decisions?

That's a little bit to-be-deter‐ mined."

He says public education is key in this process and he's keeping an eye on how far the province will consider nofault insurance.

Alternative models ex‐ plored

The long-awaited reports, re‐ leased at the same time as the survey, give Albertans an insight into what options are on the table for the province as it looks at changes.

The commissioned studies, completed by actuar‐ ial consultant Oliver Wyman and management consul‐ tancy Nous Group, looked at seven insurance models in various provinces and in Aus‐ tralia, as well as the Insur‐ ance Bureau of Canada's pro‐ posed model.

In essence, it explores public, private and hybrid systems of insurance.

Wyman's analysis sug‐ gests Alberta drivers could see the most savings with their premiums if the province switches to a public insurance model like British Columbia, which has a nofault, public insurance Crown corporation.

It says a hybrid system like Quebec's, where bodily injury is covered by a public insurer but vehicle damage is covered by private insurance companies, could also result in savings.

Meanwhile, Nous Group, which was tasked to look at economic impacts of the sys‐ tems, concluded that switch‐ ing to a public model would take up to two years and come with a price tag of nearly $3 billion.

Instead, it says maintain‐ ing a private system could have the least economic im‐ pacts.

The Insurance Bureau of Canada - which represents insurance companies - has publicly raised concerns about Wyman's calculations, which suggested its proposal could come with some cost savings but not as much as other options.

The bureau has been proposing a system similar to New Jersey's, where drivers have more choice about type of coverage, ability to sue and, in turn, how much they pay.

One thing the bureau and consultant can agree on? Tackling legal costs could make a big difference with Al‐ bertans' premiums.

As the province weighs its many options and it prepares to introduce legislation, the insurance industry, political watchers and citizens say they're keeping a close eye on how much Albertans' voices matter in the process.