NDP DRAWS ON HISTORY TO GET A GRIP ON ICBC
Auto insurance reform, dubbed ‘no-fault lite,’ may not stop rate hikes
As ICBC chair Joy MacPhail tells it, the New Democrats learned a thing or two from their 1990s attempt to implement no-fault auto insurance and will apply those to the coming fight over a lighter version of the change.
“I have been thinking about that because I was part of government in 1997,” said MacPhail, who served as a senior cabinet minister (health, education, finance) in the then Glen Clark-led NDP government.
“Certainly the case for change is much greater now than it was in 1997,” continued the NDP-appointed chair of the money-losing government-owned auto insurance corporation.
“I think the government today, too, learned lessons from the last time,” continued MacPhail, citing the way today’s NDP government had managed to recruit support from among those who fought change in the 1990s.
“People with disabilities and the union members for ICBC were part of the group that objected to changes we made last time. This time those are partners of the government.”
MacPhail made her comments at the Tuesday news conference where cabinetminister-for-ICBC David Eby announced caps on payouts for pain and suffering for minor injuries along with measures to rein in runaway legal costs. The changes stop well short of the full-blown no-fault scheme the New Democrats briefly touted in the 1990s.
It would have pretty much eliminated the right to go to court in favour of a fixed schedule of payments for any and all injuries.
Still, today’s version, characterized as “no-fault lite,” remains controversial. The trial lawyers’ association fired up an advertising campaign to fight the changes even before Eby confirmed the details publicly this week.
But MacPhail reflects a growing confidence among the New Democrats that this time they can win a campaign they were forced to abandon in less than a year in the 1990s.
The differences start with the vastly different financial circumstances. Premier Glen Clark embarked on the no-fault campaign after an election in which he promised to freeze auto insurance rates for two years. “The only decision I care about is keeping clients’ rates low,’’ he told reporters at the July 1996 outset of the campaign.
At the time ICBC was heading for a $150-million deficit, the equivalent of about $220 million in current dollars.
Today, thanks to successive raiding of the ICBC cash reserves and other mismanagement by the previous B.C. Liberal government, ICBC lost almost $1 billion last year. It is on track to lose a further $1.3 billion in the financial year ending March 31.
As for legal costs, when the Glen Clark government embarked on trying to rein them in, they accounted for about 10 per cent of the tab for settling claims. Today ICBC pegs legal costs at 24 per cent, more than the total payout for minor injuries themselves.
The other major point of difference between then and now involves the payments for medical care, recovery of wages and other benefits for accident victims.
The 1990s’ New Democrats froze those effective the year they took office, where the rates have remained since. Today’s government is proposing the first substantial increases in benefits in 25 years, which will be applied to anyone injured in a crash, regardless of fault.
Hence the other take-away from MacPhail’s comments, namely the shift in the makeup of the opponents to auto insurance reform.
The 1990s advertising campaign was also well funded by the trial lawyers.
But the public face of the protests was the B.C. Coalition of People with Disabilities, led by its then executive director Margaret Birrell. A longtime NDP organizer and former candidate for the party leadership, she took the fight to the floor of the March 1997 NDP convention and pretty much routed no fault then and there.
Whereas at Tuesday’s news conference, as soon as Eby had finished speaking he gave up the podium to Jane Dyson, present-day executive director of the Disability Alliance B.C., today’s name for the organization Birrell headed.
“Disability Alliance B.C. has been advocating for improvements to accident benefits for 12 years,” she was quoted as saying in the accompanying news release. “We welcome these long overdue changes that will mean that people who are catastrophically injured in motor vehicle accidents have better supports available to help them rebuild their lives.”
Echoing that endorsement, was Giovanna Boniface, national director of professional affairs for the Canadian Association of Occupational Therapists.
“These changes will allow more people to have access to the treatment and adaptive equipment they need, thereby fostering quicker recovery and return to meaningful daily activities,” she said via the same news release.
The increased payouts for accident benefits will mean another $200-million hit on the ICBC books. But even with that additional cost, the company is expected to save $1 billion a year from the cap combined with a drive to shift minor injury claims from the courts to an independent dispute resolution tribunal.
The only catch in all this for ratepayers is that the two sets of changes won’t take effect until April 1, 2019, a long lead time made necessary by legislative, regulatory and other considerations according to Eby. Until then, the old order will prevail.
All of which would appear to set up more losses and perhaps the need for further rate increases, though on Tuesday, Eby was refusing to confirm or deny either possibility.
Certainly the case for change is much greater now than it was in 1997. I think the government today, too, learned lessons from the last time. JOY MacPHAIL, chairwoman of ICBC