B.C. Opposition Claims ICBC ‘Cash Grab’

Terri Goveia | March 5, 2010

Does B.C.’s latest budget indirectly shelve ICBC rate reductions? Opposition critics say transferring surplus ICBC funds to government coffers constitutes a “cash grab” that denies drivers further rate reductions.

Under the terms of the provincial budget, unveiled March 2, the Liberal government will take $778 million from ICBC surpluses-- currently used to give good drivers rebates—over the next three years.

NDP MLA Bruce Ralston, the opposition critic for finance, is questioning  the move to limit the insurers’ cash reserves—“why doesn't the minister leave it to the ICBC board of directors to make the decision how large their cash reserves should be, rather than by enshrining it in legislation and forcing them to transfer it to the government's books?” he asked during the March 4 question period.

But the province’s Finance Minister Colin Hansen counters that industry standards dictate surplus levels, and that the ICBC’s reserves “were far in excess of what those national and international standards would require,” he said during the same Question Period. “It is entirely appropriate that the provincial government, representing the shareholder, which is the taxpayers of British Columbia, ask for those dollars to be transferred into the consolidated revenue so that we can reduce what would otherwise be borrowing requirements of the province.”

Another critic, MLA Mike Farnsworth, suggested that the transfer, combined with the HST, would deny ICBC customers potential savings. “With this $780 million unprecedented cash grab, they are taking away the opportunity to reduce optional coverage and other coverage even further,” he said.

The funds in question won’t take away from ICBC customers, since they come from the  “optional” side of the business, Hansen said, noting that customers wouldn’t  be impacted on the rate side, since they’re free to shop around for optional coverage. “That's a competitive marketplace, and we'll ensure that as long as government maintains a level playing field, which is what we are, British Columbia motorists are going to get the best rates possible on optional coverage.”