Ontario’s opposition parties say the Liberal government failed to keep its promise to cut auto insurance rates by 15 per cent and call a mandated discount for winter tires “a gimmick.”
The Liberals promised to reduce car insurance premiums an average of 15 per cent by last August as part of a deal to get NDP support for the 2013 budget when they were still a minority government.
Finance Minister Charles Sousa said some companies have cut premiums 10-to-15 per cent while others haven’t cut them “near enough,” but he’s confident they will be down further when new figures are released October 15, 2015.
“What we want to do is ensure that we have a sustainable approach that enables those insurance companies to reduce rates by reducing the costs of those claims,” he said.
The New Democrats said the Liberals broke their pledge to cut rates 15 per cent in two years in a “colossal” way.
“They’ve consistently put the interests of insurance companies ahead of the interests of Ontario drivers, who are paying the highest auto insurance premiums in the entire country,” said NDP auto insurance critic Jagmeet Singh.
The Liberals never had a real commitment to cut rates 15 per cent, and only made a promise to “buy off the NDP” in 2013, said Progressive Conservative finance critic Vic Fedeli.
“It was a hollow plan,” said Fedeli. “It was only words and never backed up with any action.”
Premiums actually increased slightly during the last quarter, but Sousa said new legislation will lower costs further for insurance companies, which he insisted will lead to reduced rates for drivers.
“We are going to continue to be vigilant in order for those rates to go down on an ongoing basis,” he said.
The government was also working with the insurance sector to find ways of lowering premiums for new drivers, who often cannot find an affordable rate.
Sousa announced insurance companies must offer a discount starting Jan. 1, 2016 to drivers who install winter tires, but there is nothing to say how much of a cut in premiums must result.
“You would think that if you were serious about mandating a cut, you would know the percentage,” said Fedeli. “It’s more gimmicky than anything.”
Sousa rejected the idea of making winter tires mandatory in Ontario as Quebec has done, saying not everyone uses their car year-round.
“What we do want is for people to have the benefit of reduced rates when they do buy those tires,” he said. “We want that safety, but we want to leave that discretion up to the consumers based on their activity.”
The NDP said insurance companies saved over $1 billion after regulation changes introduced by the Liberals in 2010, but didn’t pass along the savings to drivers.
“They’ve consistently lowered the cost for insurance companies without making sure premiums actually go down,” said Singh. “So they’ve given insurance companies all these cost saving tools, cut their costs in so many ways, but there hasn’t been any proportional reduction in premiums.”