ICBC – The view from Pete

Partisan attacks against the NDP/ICBC policyholder rebates is manna from heaven for the NDP.

It was announced the other day that from the ballooning ICBC surplus, that the crown owned insurance company would send to policy holders a rebate of $110 for regular policy holders and $165 for commercial policy holders in response to record high gasoline prices.

The attack from the BC Liberals and their affiliated partisans was that the sum wasn’t enough. Others took an opportunity to politically eviscerate ICBC and the NDP’s reforms therein.

The NDP couldn’t be happier with this clumsy self-own from their political adversaries; and in doing so, the opposition made themselves out to be the elitist, corporate owned entity that they are. So much so that I predict they will be nostalgic for Andrew Wilkinson soon.

But first, some background on ICBC.

The Insurance Corporation of BC was established in the 1970’s BC NDP government under Premier Dave Barrett. The idea was that vehicle insurance should be a publicly held and controlled entity and that it should be provided at or near cost to the public.

It’s roll out was clunky to be sure and it we met with immediate hostility to a patchwork of private insurers at the time. Despite the chaos it was born from, its largely met its purpose, despite every effort by opponents of the NDP (Social Credit, BC Liberal) to hobble and dismantle it.

That is until the latter half of the last BC Liberal regime.

In the past, if there was a surplus in the operations of ICBC, it was utilized mostly to keep insurance rates low – or cap any potential rate increases. ICBC, like BC Hydro (for much the same reason) were the crown jewels in the BC advantage for residents and drivers.

The BC Liberals saw an opening though. They would direct both crown corporations to divert billions of dollars of their budgets to the provincial government as a backdoor tax increase – to increase revenue as other (‘trickle down’) ideas failed us.

They did this despite hobbling the operations of both crowns. In the case of BC Hydro, they were compelled to borrow the money for which the province claimed as income – creating a better bottom line budget number than what would have been revealed. For ICBC, this ‘dividend’ was taken regardless of the the plight of the insurance carrier and drained its reserve funds.

In both circumstances, world events and market conditions demanded that both crown corporations see some internal reforms so that they would remain solvent and viable operations into the future. The BC Liberal government went as far as commissioning a report to examine the operations of ICBC and what reforms were needed.

They had the information, they knew what to do. They failed to act. Not only did they fail to act, they attempted to conceal the truth from the public.

The ICBC dumpster fire is a narrative well told in BC’s political world, it partially led to the landslide re-election of the NDP in 2020 after a fluky minority NDP government that only took office with one seat parliamentary majority with the assistance of the BC Green Party.

Why is this relative now?

As a result of the ICBC reforms instituted by the NDP after 2017, the crown corporation now operates largely on a no-fault system. This cuts out much of the litigation costs; and more importantly, cuts out billions paid to trial lawyers who you can imagine are not impressed in the slightest. I mean, I can understand this to a point; especially if you’ve set up your entire legal practice based on the former ICBC adversarial litigation model.

For the rest of us, we saw this as a cash cow for lawyers that inflated premiums as ICBC had to pay awards – to clients and law firms…on top of everything else going on that shouldn’t be.

The reforms instituted by the NDP to ICBC has freed up billions; much has been returned to policy holders already. At least $1.4 billion has been returned and pledged (as of this last weeks announcement) plus a rate reduction last year of 20%.

Shouldn’t rate reductions and insurance rebates be celebrated? Of course. That this has been at all possible is quite a miracle compared to the direction ICBC was headed in 2017. Five years later, a large surplus – with billions going back to drivers.

Politically speaking, if I was a BC Liberal, I would avoid talking about ICBC at all – as the public will have a good memory their intentional, malicious ineptitude while handling this file.

So this was the time their MLA’s go on the attack?

The NDP could not have asked for a better opportunity to remind how badly the BC Liberals failed BC on ICBC.

In trying to score a drive-by smear that the NDP hasn’t done enough to help drivers, the BC Liberals inadvertently revealed their incompetence and why they should not govern..at all.

The BC Liberal approach is typical – lower gas taxes. This is modelled after what Alberta is attempting by suspending their own gas tax (cutting 13 cents per litre) to “lower gas prices” and provide relief.

The thing about this move is that it opened the door immediately for big oil to step up with price increases of their own.

If you’re keeping track of this; cutting the tax as such, was a lateral transfer of money from government to big oil – that consumers still pay for…and may more for. There was no benefit to drivers at all; but exposed the BC Liberals as lackies to both big oil and irrelevant.

Even the notion they have floated about cutting the carbon tax (which they created) would suspend a one penny per litre increase slated for April 1. Same math applies, cut the tax, industry picks up the slack.

Gas taxes in BC are expressed in terms of cents per litre, so the BC gov’t makes no extra money if the retail price goes up. Only the GST (which is charged as a percentage) would increase its cash intake with a retail price increase.

Cutting BC’s various gas taxes would merely cut into provincial revenue; potentially harming the funding for programs which depend on said funds. We’ve already shown how industry would scoop up what the taxes would drop, so no benefit goes to the driver. This flawed ideology exposes the BC Liberals and almost every conservative politician pushing this narrative; a narrative that is a warm breath away from the proven failure of ‘trickle down economic theory’.

But, as General Napoleon Bonaparte once remarked – ‘never interrupt your enemy when he is making a mistake’.

My2bits

Voting now isn’t ideal, but waiting is worse.

Once you get over the relatively early election call, you’ll come to the same conclusion. Its about choices. Revert back to the party and leadership brand that hurt BC’s most vulnerable, destroyed the BC forest industry, bled the life out of BC Hydro and ICBC for political gain, and attacked educators and healthcare workers in unions who are 80% female in demographic composition. Or keep moving forward from that 16 year legacy of destruction – with the NDP.

I’ve made it clear that I don’t generally want a snap election, but having one doesn’t dissuade me from my vote – or who I will vote for. In fact, this gives us the opportunity to crush the BC Liberals like they rightly deserved in 2017.

Do it.

While I appreciate the Green Party choosing to side with the NDP in the early days just after the 2017 election, the unique circumstances that gave us this minority parliament are a one-in-a-million and not likely to repeat themselves. I understand that it could have gone the other way. Chances are that this arrangement isn’t going to happen again; it will either be a BC Liberal or an NDP majority government.

Of course, all hasn’t gone to plan…and sure, no party is perfect. Nobody could have predicted a global pandemic that would disrupt our way of life, but here we are. Which goes to the next point.

There are some who would have argued against an early election because of the pandemic, and I hear your point. You are saying that there is a major infection risk to large groups gathering (to vote, I assume). But let me tell you this: ElectionsBC, the non-partisan agency that manages provincial elections, has been working closely with the Provincial Health Office to plan a mitigation process so that voters’ risks are slim to none.

Expect generous early voting opportunities and expanded absentee/mail-in options. The bottom line is that voting in BC will be as safe as ever, and given some recent examples of fuckery happening south of us, free from interference by one side or another who would rather you not vote – or not allow your vote to count.

Yes, it sure seems that we’re on an upswing in covid19 reported infections in BC. While we have done very well in managing the pandemic provincially, every sign is pointing to an unavoidable second-wave. So lets try on a thought experiment:

Should we have had that election three months ago when case reporting was lower than it is now?
Should we wait until later when caseload reporting is explosive and we’re risking another shut down?
Should we go now when its safe and under the close guidance of the public health office?

I’ve been monitoring the debate publicly, and there’s some surprising correlation between those who demand their businesses (night clubs, high capacity venues, etc) be allowed to open up with exemptions to the safe opening rules – and those arguing its unsafe to vote.

‘but its too early’

This minority parliament has survived longer than almost every pundit suggested. That its lasted three-and-a-half years is pretty good. The fact that most minority governments last less than two years, BC can take a bow.

With all the safety precautions in place, voting by mail, etc, to *not* vote would be its own choice. With grave consequences. I point to the example (also) south of us of what not-voting could produce. It gave America a Donald Trump presidency, and may do so again.

The BC Liberals are not any better than the broken version of the party they were in 2017. They are worse. They chose as leader one of the worst examples of the 1% elitist ruling class they could have picked. They said the quiet part out loud. Andrew Wilkinson has consistently proven himself to be the champion of the Howe street elite with zero regard for what goes on in your town, or main street.

What’s worse, is Andrew Wilkinson is no outsider. He was party president of the BC Liberals when Gordon Campbell came to power in 2001; moved on over to government payroll as a deputy minister shortly after. He’s been a lobbyist to pressure government policy, then was a lawyer suing government on behalf of big tobacco when he was outside government.

Then he ran for a seat, became a Christy Clark cabinet minister and later Leader of his party.

While there is nothing illegal or technically wrong about Andrew’s political career path, he cannot at all claim to be any sort of brand renewal or offer any ‘fresh start’. Especially when he’s already signaled his campaign priorities will be massive tax cuts for the rich – exactly where Gordon Campbell left off.

This is the narrative that got Campbell his majority too. But the tax cut flowing from this promise produced the worse non-pandemic related deficit in BC history and led to a decade of cuts to funding to the most vulnerable in BC with service fee increases for everyone else. For the ‘average people’, their tax cut largely evaporated.

No, the NDP are not perfect, and that wouldn’t change in a majority government either. People are allowed to not-be perfect and this is a fair standard for our political leadership too. But I will happily choose to re-elect that imperfect-but-trying NDP government than one that is willfully harming the citizens its pretending to govern under the BC Liberals.

We cannot go back.

My2bits

BC Liberals mishandling of ICBC is reminiscent of their failure on the real estate file

They were expecting to be re-elected and have time to extinguish the fire they started

To listen to the BC Liberals talk, everything was going swimmingly when they handed over the keys to power in 2017.

But as it turns out like everything, the truth was a lot different than the rhetoric.

The BC Liberals would claim success on the real estate front except the fact that their industry reforms in the early 2000’s led to the outrageous shadow flipping and affordability issues the lower mainland now faces. It’s taken a speculation tax and re-regulation to partially slow down an overheated market.

The motivation was obvious. When homes and property is sold, they pay a property transfer tax that amounts to billions in provincial revenue that doesn’t have to come from income tax or sales tax. The problem with this scenario is that it pushed real estate prices into the stratosphere with hyperinflation increases that all but ruled out home ownership for average people.

By the time the BC Liberals reacted and reigned in the shadow flipping cash cow they created, the damage was done.

What the BC Liberals never considered is that for the economy to function, you need your blue collar, front line workers an ability to live and work in the economy they’re supposed to provide services into.

Nobody can afford to live in Vancouver unless you’re well above $150k a year income level. Imagine trying to operate a restaurant where you cannot hire cooks or servers because they can’t afford rent in the area they’d need to work in, and the prevailing wage structure doesn’t come close to helping them.

The BC Liberals created a 1% economy that catered to the top tier and ignored everyone else.

The downside that nobody is talking about here is that eventually the real estate market will crash out unless there’s some intervention to let the steam out slowly. A crash here triggers a recession.

How is this related to the BC Liberals mishandling of ICBC? It’s the same pandering to their well financed benefactors. But instead of big real estate and big developers, it’s trial lawyers.

It’s the same re-jig of regulations that opened the door for friends to make a lot of money while ignoring the potential damages it causes.

In the case of ICBC, the BC Liberal changes allowed for more litigation and court fighting which amplified legal fees and payouts; all of which is covered by ratepayers premiums.

What the BC Liberals did, instead of taking the extra revenue from a property transfer tax, is they scooped reserve cash from ICBC for the same reason. It wasn’t a sales or income tax.

In hauling money out of crown corporations and cashing in the windfall from a white-hot real estate market, the government was taking in $3-4 billion per year that was unrelated to the performance of the economy, and literally it was unsustainable.

They were warned on ICBC. They chose to ignore it.

Fast forward to the current moment. The BC Liberals are spending heavily as opposition party in their chosen social media venues to attack the NDP over ICBC.

What kind of idiots do they take us for?

The NDP is trying to navigate a path to repair things the BC Liberals willingly broke. And they’re doing so while simultaneously fighting legal challenges by the benefactors who’re seeing their gravy train dry up.

Well I’ve got news for you. My ICBC premiums are for my protection, so that I’m insured while driving my vehicle; no matter what happens. It’s not the BC Liberal money tree they can freely pluck from because of their own financial incompetence.

The NDP might not be perfect nor get everything right. But I appreciate that they’re trying to fix what was broken and are moving the ball forward.

So while this process might be awkward and imperfect, I’ll gladly vote for the NDP in the next election for attempting the right thing.

The last thing BC needs is a return to office, the BC Liberals who deliberately and willingly tried to break and vandalize the things we hold dear. May they never see the inside of the halls of power again.

BC Liberals playing a dangerous game with ICBC

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Loudmouth BC Liberal MLA Jas Johal appears to have committed the BC Liberals to putting ICBC brokers out of business. In the article where the above clip comes from, Jas comments that by offering online insurance renewals, clients could save the broker share of the costs and pocket several hundred dollars as a result.

This presumes that an online apparatus is free to run (it isn’t), it assumes that no problems would arise as a result (unlikely).

Where does one pick up their insurance decal when ordering online?

But here is the kicker: there is absolutely no evidence that the BC Liberal Government prior to the 2017 handover was planning a roll out of online ICBC renewals. This seems to be another hot-air idea drummed up by overly ambitious BC Liberal hacks seeking out a position merely to attack the NDP with.

This doesn’t assume that online renewals cannot be done; you can do almost anything online. But to retain some buy-in from the industry, there will have to be some sort of check-off for originating brokers to get some residual fee from a renewal.

ICBC brokers charge a fee to resell insurance. Of course they do. EVERY insurance broker makes a percentage or fee from an insurance package they sell – whether car insurance, home insurance, life insurance, or anything. Its how a brokerage exists; those margins define the revenues for these independent brokers to exist…and provide a human contact between insurance company and client.

This latest pseudo-outrage over what ICBC pays out to brokers is a giant #nothingburger. As a precentage, ICBC brokers change on average 8% back to ICBC as their margin. This is less on average than what other brokers charge for vehicle insurance elsewhere in Canada.

If anything, should ICBC be dismantled and a privatised model take hold, those rates could indeed rise; as would almost every other fee possible. ICBC isn’t perfect, and the upheaval its going through isn’t unlike others in the industry.

What this imaginary fiasco really is, is a distraction as the government is facing legal action by the trial lawyers association over legislated caps to soft tissue damage awards…caps that exist elsewhere in Canada and have withstood legal challenges there too.

I get it, turn ICBC into a phantom enemy so its easy to hate it and legitimise a campaign to destroy it. But the BC Liberals with their 16 year legacy of power saw no urgency in dismantling ICBC; they instead saw an opportunity to use the insurance corporation as a cash cow to prop up their imaginary budget surplus. That is the real scandal.

Sure the BC Liberals aren’t in office anymore and its the NDP’s show. Ok, so let them get it done. The reforms they’re undertaking were the ones originally hidden from public knowledge in the secret report into reforming ICBC that the BC Liberals didn’t want anyone to see. Its a report that highlighted problems *and* fixes.

Its a report that had the BC Liberals retained power, they would be enacting said reforms too.

The BC Liberals are now wasting time attacking the NDP for fixing the thing that the Liberals tried so hard to break and bleed white.

Look, the NDP isn’t perfect as they’re journey in power hasn’t been exactly smooth. But the alternative #partyofstupid is unthinkable.

My2bits