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
The view from Pete 