It’s Official: Ontario Liberal Government Fails To Bring Auto Insurance Rates Down As Promised

Ontario Liberal Finance Minister Charles Sousa has failed to honour a government promise to lower Ontario auto insurance premiums by 8%.

Ontario Liberal Finance Minister Charles Sousa has failed to honour a government promise to lower Ontario auto insurance premiums by 8%.

Despite legislation passed by the Ontario legislature that mandates it, the Ontario government’s goal of an 8% auto insurance premium reduction over one year and a 15% reduction over two years, is not going happen.

This was officially confirmed Wednesday when the Financial Services Commission of Ontario (FSCO) released its third quarter rate changes for the three months ending September 30, showing that for the second straight quarter, there was essentially no change in auto insurance rates in Ontario.

This means that during the four quarters that the government promised an 8% reduction, auto insurance rates in Ontario fell only 5%.

And this was no ordinary government promise that is being broken. The promise of an 8% reduction over one year and a 15% reduction over two years, was the centre-piece of the 2013 Ontario budget and is embodied in legislation and regulations passed by the Ontario government.

Some background on the issue: In 2010, the Ontario government slashed statutory auto insurance benefits that in just one year resulted in $2 billion in savings for Ontario auto insurance companies.

And predictably, auto insurance profits went through the roof giving the auto insurance industry some of the best financial results in years between 2011 & 2013.

Here are two examples of the 2010 benefit cuts:

Example 1: Because of the 2010 changes, the $100,000 maximum for medical/rehabilitation benefits was reduced to $3,500 for minor injuries (even though many so-called minor injuries are quite significant) and $50,000 for even more serious non-catastrophic injuries.

Example 2: The $72,000 maximum attendant care benefit for non-catastrophic injuries was reduced to zero (yes, zero!) for minor injuries and $36,000 for non-catastrophic injuries.

It was a direct result of these benefit cuts – and the subsequent near-record industry profits – that the Ontario Liberal government made the 15% cut in premiums the key plank in its 2013 budget.

And we’re not talking about any old promise – this was the key promise of the 2013 Ontario budget. This was the promise that allowed the Liberal government to survive because a 15% premium reduction was the key demand of the NDP for the Ontario budget – the main reason the NDP allowed the Liberal government to survive another year!

The failure of the government to honour its promise to Ontario’s eight million drivers comes as a direct result of intense and growing pressure from the auto insurance industry which has fought the premium reduction every step of the way.

And the industry has not been shy about publicly voicing its opposition to the 15% cut.

 The promised premium reduction is “absolutely not” doable, the Insurance Bureau of Canada’s Barbara Sulzenko-Laurie said in a late September panel discussion at the National Insurance Conference of Canada.

Even more telling are Ms. Sulzenko-Laurie’s exact words uttered publicly at the conference which makes clear that not only was the industry doing everything possible to block the promised 15% premium reduction, but that the government is a full partner in this outright lie to the Ontario people.

When asked whether the promised 15% reduction was going ahead, Ms. Sulzenko-Laurie’s said:

“Absolutely not, and I think the government fully knows that although the government has not come out and said it”.

“But certainly in our conversations with the superintendent of insurance, he’s indicated to us that no one in FSCO (the Financial Services Commission of Ontario – the regulator of auto insurance in Ontario) believes that there’s 15% that’s in the system (to be reduced),”

“When we’re talking to the political side (Ministers and their staff), they don’t admit it, but they sort of smile knowingly in response to the question”.

So the Ontario government knew all along that it was not going to honour its promise to 8 million Ontario drivers to cut Ontario auto insurance premiums by 15%. And it finally made it official Wednesday in an obscure post on the FSCO web site.

So despite there being a law mandating the 15% premium reduction over two years and an 8% cut over the year ending September 30, the insurance industry has decided this promise is just not going to happen.

And the government, as it often does, has caved to the industry and is hoping no one will notice until it can come up with a spin-line that will provide a lame excuse for why their number one promise to the Ontario people in their 2013 budget has not been kept.

Rest assured that well paid communications staff from the industry and the Ontario government are meeting as you read this and hammering out that spin-line!


10 thoughts on “It’s Official: Ontario Liberal Government Fails To Bring Auto Insurance Rates Down As Promised

  1. Cathy Bowslaugh

    This is crap! Can they be held accountable at all for this? This is why we need an Election Accountability Act. Liberals knew full well that they couldn’t do this but promise it anyways to get elected, then quietly announce on an obscure website that it’s not going to happen! They need to be held accountable for every promise made, and pay for losses and scandals out of their own pockets rather than screw the taxpayers yet again! Otherwise, they can write truckloads of empty promises and who’s going to stop them?

  2. Brian O'Hallarn

    Well surprise surprise!! Did any intelligent person really believe this would happen given the track record of this corrupt lying gov’t.

  3. Anthony Noronha

    Unfortunately Cathy, It is not in any Governments interest to approve a recall. The elected want to hang onto power as the old adage goes Power corrupts and absolute power corrupts ABSOLUTELY. Getting back to another one of the LIEBERAL Gov’t Lies and scandals, successive liberal governments now have lied, cheated and weaseled their way back to power by promising us Ontarian’s transparency and not only sugar coating but putting icing on top to get back into power. What we need is another viable party with a leader who doesn’t have foot in mouth disease to defeat these crooks. Unfortunately, we have another 3 1/2 years of lies, broken promises and scandals to put up with.

  4. pissed off in Ontario

    What you expect from idiots voting in idiots. You can’t fix stupid and the fiberals are as stupid as it gets next to this idiots in Toronto who put them there. Well done Toronto another political screw up because of you. Just wait until you find there are no funds available for your road project morons.

  5. Ryan kelly

    they don’t care about you. Politicians on both sides don’t care about you. They are concerned with one thing. Making big business money so they can get their kick backs. The government no longer works for the people. Open your eyes people. The people running the show are criminals in league with criminals. Canada is a forgotten dream. Free Country my ass! Owned country is more like it

  6. Anonymous

    Not the Liberals fault! They are the most consistent of all the Parties. The were Liars under Mcgnutty and continue to be liars under Wynn. Ontario voters are to blame. With all the evidence before them with a clear and evident pattern of lies deciet cover up they chose to believe the lies!! Its gonna get a lot worse before it gets better.

  7. Anonymous

    What else is new. Polatitions only know how to lie and cheat us out of everything. Maybe the people should just not vote then what would they do.

  8. Anonymous

    Politians are and always will be self serving. Lie to get elected and lie to stay in power. Their should be a maximum #of years served/8 ? With pensions indexed.

  9. tom

    What got lost in the last election than in order to help reduce the cost to insurance companies and consumers physiotherapist along with 10,000 other people that treat motor vehicle injuries where forced to pay a licensing fee to the provincial government to help pay for the cost of running fsco no fault offices . the cost to these people putting you back together after an accident has been hundreds of dollars just to be able to bill for there services and now will also be forced to pay the government a percentage of the income for a motor vehicle accidents every year and on top of that they can now enter that office and demand to audit their books another intrusion into your private business on top of federal governments right . Already the insurance companies reap huge financial benefits under the law ! if you have a thousand dollars deductible of extended health private insurance and a drunk hits you with his car and its not your fault and the bill comes to $1010.00 your extended insurance company must pay the 1000. dollars first the drunks insurance pays the the ten dollars . Now in six months if you fall down the stairs and the physio bill is a 1000 dollars to bad it comes out of your pocket as you used it for the car accident is this not a crime and feathering the bed of the very influential car insurance companies . the problem is as individuals as we lie on the ground in pain only a few people hear us the same as when we have to pay that 1000 dollars in physio cost but is worse is many can’t afford the physio and may cost society more if the fall down the stairs results in long term disability because of the lack of proper physio care


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