Province says new law will benefit drivers' rates by keeping government hands off ICBC profits
B.C. NDP will introduce a law this week designed to keep any future surpluses within ICBC to benefit drivers
The B.C. NDP will table legislation this week to prevent government from scooping up any potential ICBC surpluses and funnelling that cash elsewhere.
Attorney General David Eby had hinted at this reform in the fall, and now confirms a bill will be introduced to ban the province from taking "surplus optional capital" out of the public insurer to lower its own borrowing requirements.
"This will continue to put public pressure on ICBC and restrict a future government's ability to transfer that money anywhere else, except to reduce rates or increase benefits for drivers," he announced Monday.
Eby said the previous government treated ICBC like an ATM by taking a total of $1.2-billion of optional capital out of the corporation. At five per cent interest, he added, that could have translated into $60-million a year to reduce basic rate costs.
"The goal for ICBC is not to generate significant profits," he told reporters at the legislature. "It's to operate at near break-even and then pass on, as much as possible, any savings that might be available to drivers."
That means any future government wanting to scoop up possible profits from ICBC would first have to reverse this law.
"The reason for passing it is to ensure they couldn't change it quietly by regulation or a direction to the B.C. Utilities Commission through an order-in-council or something like that; instead it would have to be a very public debate on the floor of the legislature before money could be taken out."
Eby acknowledged the idea of ICBC generating money has been nearly unthinkable in recent years, with the corporation bleeding $2.5-billion over the past two years.
When asked about the possibility of mirroring some other provinces that have turned auto insurers into not-for-profit companies, Eby joked, "In my experience, ICBC is a not-for-profit."
But ICBC is projecting a 'modest surplus' for the fiscal year ahead.
The province says the basic rate change for drivers next year will be held at zero per cent, with most seeing rate changes at or below the rate of inflation — even when buying optional insurance.
Eby also pointed to the no-fault style insurance system to be rolled out in the spring of 2021, with projected savings of around $400 per driver.