SGI customers to receive average $285 rebate per vehicle this May
Agency says rebate due to strong financial position, fewer crash claims due to pandemic
Car owners in Saskatchewan will be receiving a one-time rebate from SGI this spring thanks to a strong stabilization reserve and fewer crash claims during the pandemic.
The Crown corporation said it's passing about $350 million in earnings on to Saskatchewan residents.
The majority of that — $285 million — will be in the form of a one-time rebate that will vary by customer, with the amount calculated based on a proportion of vehicle premiums paid in the past three years, according to a release from SGI. The remainder will go toward improving long-term injury benefits
The release said details are still being finalized, but the average rebate is expected to be approximately $285 per vehicle or "approximately 26 per cent of an average annual premium in Saskatchewan."
Minister Responsible for SGI Don Morgan said the rebate will be based on the average the customer has paid over the past three years prior to Dec. 31, 2020.
"So if you've had vehicles that were more expensive to insure, then your rebate is naturally higher," he said. "If you've got a number of vehicles, then of course you'll receive a larger sum as well."
Your driving record will not impact the payment. If someone died during the calculation period, the estate will receive the cheque.
We're hoping that people will take the money ... and use it for something that's good for the province and good for the economy.- Minister Responsible for SGI Don Morgan
Morgan said the rebate will apply to any vehicle registered in the province, including trailers and school buses, so school divisions and trucking companies will see the largest rebates.
"These are people that have weathered the COVID storm with the rest of us, people that have had two or three vehicles, some of them not even driving very much for the last year," Morgan said. "But they've all had the expenses of buying insurance, licensing, registration and vehicle maintenance."
Morgan said the government thinks this is a good way to reinvigorate the economy.
"We're hoping that people will take the money, spend it in a safe way, keeping appropriately distance, wearing masks for the time being, and use it for something that's good for the province and good for the economy."
Last rebates issued in 2006 and 2007
SGI president and CEO Andrew Cartmell said the last time SGI issued a rebate was in 2006 and 2007.
Cartmell said SGI is able to do this because of fewer crash claims due to the COVID-19 pandemic and the province's auto fund rate stabilization reserve being in a strong financial position due to investment returns.
About $100 million in savings is likely due to claims activity, while the rest of the money is due to the investment portfolio performing well, Cartmell said.
All Saskatchewan vehicle owners pay into the auto fund, which maintains the rate stabilization reserve (RSR). The RSR protects customers from sudden rate fluctuations.
The RSR saw losses last March in the early days of the pandemic, but the last quarter in particular has seen strong investment earnings, the release said.
Rebate cheques will be sent by mail in May to customers who have paid auto fund premiums in the past three years and are residents of Saskatchewan.
SGI encourages customers to verify their mailing address to ensure they receive their rebate.
Enhanced long-term injury benefits
The agency is also enhancing long-term injury benefits for people injured in vehicle crashes.
The release said customers who require assistance with daily tasks like dressing, bathing, cooking, cleaning and yard care will see increased maximum payments for those services "to better reflect current market rates." SGI said this impacts more than 1,100 customers.
SGI will also no longer reduce income benefits if customers are also receiving a CPP payment. This change benefits about 200 people, the agency said.
NDP calls rebate a 'cynical U-turn'
NDP Official Opposition Critic for SGI Aleana Young said that while the rebate is welcome for people who are stretched thin, it's a "cynical U-turn" for the Sask. Party, which lambasted a similar idea when it came from the NDP during the recent election.
In September 2020, Premier Scott Moe's press secretary, Jim Billington, characterized the NDP's promise to use the SGI savings account as an "election slush fund" that would pile millions of dollars more onto the province's estimated $2.1 billion deficit.
"We are calling on the government to work with SGI to reduce rates in a sustainable manner to make insurance more accessible in the long-term for Saskatchewan families and businesses," Young said in a statement.
Jeff Stepan, chief financial officer at SGI, said the agency had the option of either offering a rebate or reducing rates over a longer period of time.
"Given the situation with the pandemic, the economy in Saskatchewan, it was decided that the better way to go would be the rebate to get cash in people's hands more quickly rather than just slowly through reduced rates," Stepan said.
In mid-January, Stepan told CBC there were no plans for a rebate but he said on Friday that rebates were never ruled out.
He said closer to the end of January, SGI had a better idea of how their portfolio was performing and felt more confident in the decision to offer a rebate.
With files from Heidi Atter