ICBC Shell Game: Almost $500m Diverted to General Revenue

Government Financing Deficit Through High ICBC Rates:

Victoria, BC – The Provincial Budget released today indicates that the BC Government is using ICBC rates to finance its budget deficit to the tune of hundreds of millions of dollars per year, according to the union representing workers at the Insurance Corporation of British Columbia.

The government has directed that from 2010 onward a substantial proportion of ICBC’s enormous revenues will be directed into the consolidated revenue fund, instead of being re-invested or used to lower automobile insurance rates from British Columbians, says the Canadian Office and Professional Employees Union, Local 378 (COPE 378).

“The government is playing a shell game with its revenues, and British Columbians and ICBC customers are being forced to pay the price – in this case almost $500 million dollars,” said COPE 378 Vice President David Black. “This money should be used to lower ICBC rates and be re-invested in employee investment, benefits to victims of car accidents, and community safety strategies, rather than asking British Columbians to secretly finance the government’s fiscal mismanagement,” added Black.

“It’s the government’s job to finance their budget - not people who are just insuring their cars,” said Black.

The 2010/11 Budget and Fiscal Plan states that the province has decided to have ICBC remit its excess capital to the consolidated revenue fund on an ongoing basis rather than be used for re-investment or rate decreases. At the same time, the budget also notes that operational costs are significantly decreasing. The forecasted transfer for 2010 is $487 million dollars.

The 2010-2012 ICBC Service Plan also notes that the government will have to amend The Insurance Corporation Act for this change in revenue diversion to take effect.

“The provincial government and ICBC really have no justification to keep insurance rates so high when revenues continue to skyrocket and costs decrease,” said Black. “However, they are secretly using ICBC rates to finance their deficit,” added Black.

The provincial government is simultaneously telling ICBC employees to expect a wage freeze and no new benefits in upcoming collective agreement negotiations. The collective agreement for ICBC expires on June 30.

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