Ontario’s New Democrats would have low auto insurance rates by 40 per cent if elected next month, leader Andrea Horwath said Wednesday.
Horwath said she would raise the ban rate for 18 months while a commission investigates and recommends a new system.
“Within two years you will see the 40-cent reduction in bills,” Horwath said at a campaign stop at an autobody shop in Brampton, Ont.
She said that the auto insurance system is broken and that a new system for all the possibilities of a public, government-run one to be fully private.
“Auto insurance costs are unfair in Ontario,” Horwath said. “We’ve known this for years and years and we’ve had some of the highest auto insurance premiums in the entire country and yet we need to fix this and we can fix this.”
Horwath would also be the practice of different auto insurance rates based on postal codes.
“This is not a gimmick, we will work hard to change the system,” she said.
The commission would explore no-fault insurance systems in Manitoba, Saskatchewan and British Columbia and Quebec’s public and private hybrid system, she said.
Auto insurance rates would be frozen and the 40 per cent reduction would be free of that rate, Horwath said.
The NDP would also introduce legislation to ensure that rate reductions are permanent, she said.
The former Liberal government promised reduced car insurance rates by 15 per cent in 2015 but failed, with premier Kathleen Wynne later admitting it was a “stretch goal.”
Liberal Leader Steven Del Duca said Wednesday he is focusing on the affordability of the broader issue and his “buck-a-ride” transit pledge.
“We’ll continue to look for ways to make auto insurance accessible and affordable and fair for people regardless of where they live,” he said at a campaign stop in Toronto.
The Progressive Conservatives, who are seeking re-election, said in their April budget that they want to tweak auto insurance rules to allow for more choice, fairness and crack down on fraud.
A government-commissioned report in 2017 found that Ontario has the most expensive auto insurance premiums in Canada, with one of the lowest levels of collisions and fatalities.
The Liberal government only achieved a 3.3 per cent rate cut in their term, the finance ministry said in 2018, shortly before Doug Ford and the PCs formed government.
A Progressive Conservative spokeswoman said Wednesday that the party’s plan to help drivers include building roads and highways, taking tolls off highways 412 and 418, and scrapping the license plate sticker tax.
A 40 per cent reduction in rates is achievable, said David Marshall, an independent financial adviser who has consolidated the state’s auto insurance rates.
“But it’s going to need a fundamental change in how the auto insurance policy is structured and how the benefits are administered,” he said in an interview.
Marshall said Ontarians pay, on average, about 35 per cent more drivers than other provinces.
The difference is that insurance companies will make the difference elsewhere, he said.
“These are politically appealing ideas, but they don’t fundamentally reduce the cost to drivers,” he said.
But Marshall said an independent commission is a long overdue.
“Promising to do it within 18 months is also a good idea because this thing’s going long enough,” he said.
“Governments Have Tinkered Attempting Margins To Reduce Rates Or Try To Increase Control Premiums So And And It Has Worked. We Need A Basic Redo.”
Marshall recently wrote a report for the CD Howe Institute on the issue, which recommended that Ontario stay away from government-run systems like those in Manitoba and Saskatchewan.
“That’s not a silver bullet because the government, once they have something in control, tend to interfere, like in BC where they have suppressed rates for a long time,” he said.
Instead, the government should tighten up its force on the language insurance policies, he said.
The Insurance Bureau of Canada, an organization representing insurance companies, said the NDP’s proposal would not save drivers.
“Instead, these proposals would result in drivers being unfairly penalized across the province, and other areas of high-risk drivers would be forced to subsidize.”
The organization said a move to government-run insurance would be an “enormous burden” to taxpayers.
The bureau said it is willing to work with any party to “fix the defects in Ontario’s government-regulated auto insurance system.
June 2 for Ontario’s election is set.
The Canadian Press was first published on May 11, 2022