The Liberal government has run out of gas on its promise to lower auto insurance premiums by 15 per cent.
The Liberal government has failed to live up to its promise to reduce auto insurance premiums by 15 per cent.
Finance Minister Charles Sousa had pledged that by next month Ontario’s 9.4 million drivers would be enjoying this premium break, but the Financial Services Commission of Ontario reported Wednesday the reduction so far is only 6.56 per cent — down from April when it was 7 per cent.
The promised cut — averaging $225 a year — was included in the minority Liberal government’s 2013 budget in order to the get the New Democrats to let it pass. That August, Sousa said it would take two years to fulfil.
“This is absolute proof they didn’t have a plan when they made this deal and that they still don’t have a plan,” Progressive Conservative MPP Vic Fedeli said.
“This is just a long list of promises they have no intentions of keeping,” Fedeli told the Star.
Despite the fact the government didn’t even reach half of its reduction target, Sousa’s office insisted the government’s plan is working.
“Our plan to tackle auto insurance fraud and reduce costs is working. But we want to go even further,” said a statement issued by Sousa’s office.
In the same email statement, Sousa dismissed that latest report from Financial Services Commission of Ontario as just a snapshot in time and offered no reason for the failing to hit the target.
“Today’s second quarter rates are a snapshot in time. Our reforms have sent rates lower on average over the last two years and there’s more to do to reduce rates by 15 per cent on average,” he said.
Last November, the legislature passed the Fighting Fraud and Reducing Automobile Insurance Rates Act based on feedback received from an expert review commissioned in August 2013. But the Financial Services Commission of Ontario reported the average rates for the past quarter actually went up slightly rather than going down.
New Democrat MPP Jagmeet Singh (Bramalea-Gore-Malton) said it is just another broken Liberal insurance promise.
“There are simply too many broken promises. Kathleen Wynne and the Liberals promised to bring auto insurance rates down by 15 per cent by August 2015. That’s a little over two weeks away. Instead, rates have gone up on average by 0.60 per and some insurance companies are raising their premiums by as much as 16 per cent — that’s quite the U-turn,” Singh said.
Singh noted the Liberals also never made good on a promised 8-per-cent reduction in auto insurance rates for 2014 and all the while “Ontarians pay some of the highest auto insurance rates in the country.”
Ralph Palumbo, of the Insurance Bureau of Canada, blamed the New Democrats for asking for — and getting — the government to go along with a figure it “pulled out of thin air.”
The bureau says Ontario’s rates are “far too high,” citing the fact average premiums in the province are more than 45 per cent higher than Alberta’s, and twice as high as in the Maritime provinces.
Critics said this major climbdown on auto insurance is only a dress rehearsal for the government when it fails to balance the budget by 2017-18. The province has an $8.5-billion deficit.
“This really is a continuation as far as I’m concerned,” Fedeli said.
Sousa originally said the province would reach 15 per cent reduction by:
- Providing the superintendent of financial services with the authority to require insurers to refile rates.
- Cracking down on fraud, including licensing health clinics that invoice auto insurance companies.
- Exploring other cost-reduction initiatives, including provincial oversight of the towing industry and collision repair shops.
- Requiring insurers to offer discounts to motorists with safe driving records.
Reduction –– Ontario motorists were expected to see an average reduction of $225 a year in their auto insurance.
Drivers –– Ontario has 9.4 million licensed drivers.
Timing –– Finance Minister Charles Sousa promised almost 24 months ago to reduce premiums an average of 15 per cent