Excerpt on auto-insurance from the official report of debates of the Legislative Assembly (Hansard)

February 4/1974

Legislative Assembly of British Columbia

1974 Legislative Session: 4th Session, 30th Parliament
HANSARD


The following electronic version is for informational purposes only.
The printed version remains the official version.


Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)


MONDAY, FEBRUARY 4, 1974

Afternoon Sitting

Mr. Bennett: . . . Many people of this province found it hard to believe this government’s performance in daylight saving time – the daylight saving time follies – but they shouldn’t really have been surprised. That was only a rehearsal for the great Autoplan premium game.

Underlying all this silliness there is a very serious danger that the Premier of this province will continue to make political rate adjustments in every aspect of public business. Are we next going to go into political rate adjustments for light bills if people complain? Are we going to go into political rate adjustments for gas rates if the people complain, or groups complain – or maybe if just the right people complain? Maybe special train fares for people that complain.

No wonder the ICBC ads feature a series of question marks. Where will he strike next? So much for experts.

Mr. Speaker, the performance of this government in connection with its automobile insurance scheme has been one of misrepresentation, mismanagement, waste, deceit, extravagance – and not just since day one, but from long before day one. The proof of all those charges isn’t in what I’ve said; it’s in what they’ve been saying all along.

I’m going to give you some examples. I want to quote from a letter that the Premier wrote, when he was Leader of the Opposition, in 1970 to a lady in Victoria. Here it is. And he says:

“As to automobile insurance rates, my sympathy is very much with an insurance agent and his small business. But they too are victims of a non-competitive controlled market. Our proposal for a Crown-owned automobile insurance agency would include the sale of British Columbia auto insurance through existing agents in competition with any other company that wished to stay in the field in British Columbia.”

This letter is signed by David Barrett, MLA, Leader of the Opposition. Shades of the steel mills. There’s his words, backed up in writing and signed.

I’m going to quote you what the present Premier – now that he’s Premier – and his Minister of Public Works (Hon. Mr. Hartley), an acknowledged rate expert, had to say about premiums during the 1972 election campaign. And remember, this was the main plank of the NDP platform in that election; this was their solemn promise; this is why they said, “Trust us.”

First, here is what the present Premier said in August, 1972, at a meeting on the Sechelt Peninsula. I quote from the Sechelt Peninsula Times.

“Mr. Barrett said the installation of a public auto insurance scheme in B.C. would protect drivers from the overcharging by private companies. ‘We would provide several side benefits to B.C. As well as cutting back auto insurance premiums by 20 per cent, public auto insurance would also put an end to the exorbitant rates charged to young drivers and it would stop the practice of charging super penalties to high-risk drivers who pay high rates because they might have had an accident, and even higher rates when they do have an accident.’ “

What about the driving certificates, Mr. Premier – the second part of the three-part auto insurance premium? What about it? No penalties.

Probably the answer is that if you’ve got a good fiction story going – and I’m trying to be polite so we’ll just call it fiction – you escalate the fiction. Because here’s what the present Minister of Public Works (Hon. Mr. Hartley) had to say in the same election, and I quote from The Kelowna Daily Courier:

“Public insurance would cost about 35 per cent less…”

He’s a little more extravagant than the former Leader of the Opposition, the Premier. It’s 20 to 35 per cent – the election is getting closer, the rate cuts are getting higher.

“…35 per cent less than the motorists now pay. This is an estimated amount spent now by t h e 185 insurance companies for administration, he said.”

He’s going to save 35 per cent because his insurance is going to have no administration.

An Hon. Member: No advertising.

Mr. Bennett: No administration cost. Look at the ICBC building in Vancouver and the Royal Towers – all those people running around, no overhead, no administration. And then he goes on to say, “Records would be kept in computers in Victoria.” Victoria in Atlanta, Georgia.

Mr. Phillips: They’re going to keep it inside those lazy susans.

Mr. Bennett: What happened to those pledges, Mr. Speaker? What happened was that the public

[ Page 30 ]

swallowed that fiction, and the once $5 million petty cash account was set up and a new round of promises began – a whole new round of promises.

For example, on March 5 last in this House the insurance Minister (Hon. Mr. Strachan) said:

“Only insurance costs and experience will be charged against this plan. The plan will be self-sustaining. All services rendered by any department of government or otherwise will be paid for from moneys belonging to the plan. No subsidy from departments.”

That’s what he said – no subsidy from departments. But right here, on December 14 last, the Insurance Corporation bought a three-and-one-half acre site in Coquitlam. About 70 per cent of it was held by a private owner who was paid $540,000 for his property.

Mrs. Jordan: Who’s the MLA for there?

Mr. Bennett: The other 30 per cent was Crown land, and our information is, Mr. Speaker, that to this day no money has been paid for this land to the Crown. Is this the pledge that the government wouldn’t subsidize ICBC to help it look just a little better than it looks right now?

Again, on March 5 last the insurance Minister accused the private insurance industry of failing to provide a good, efficient, rapid claims service. And he went on to say: “Only government has the clout and is willing to undertake the burden of overcoming these difficulties.” Some clout. Never mind the good, efficient, rapid claims service – where are the claim centres, Mr. Minister? Which one’s open and ready for March I?

Once again on March 5 last, the insurance Minister promised that no money would be squandered in wasteful administration costs. Well, let’s quote a few paragraphs from a column in The Vancouver Sun by a Mr. Allan Fotheringham. What does he suggest? Well, he talks about people getting salary increases. He says: “Someone who’s in the $17,000, $18,000 salary range is taking a jump to $24,000 to go at ICBC.” He says: “The public relations man was hired at some $35,000, but then this government puts a lot of stock in public relations men.” $35,000.

And then, he says: “There’s the matter of the ICBC grabbing, holus-bolus, seven stories in the Royal Centre.” This is the overhead and the administration costs which the Minister of Public Works (Hon. Mr. Hartley) said you weren’t going to have, and he was going to save.

Then he goes on to give a whole list of fantastic salaries. The Minister said he wasn’t going to waste any money.

And again on March 5 last, the insurance Minister promised that every single penny that comes into the plan would be kept for the benefit of the motorists in British Columbia and invested in British Columbia. Does Lloyds of London work for the ICBC for nothing? Does the computer company in Atlanta, Georgia, work for the ICBC for nothing? Does the Royal Bank have its head office in British Columbia, Mr. Speaker? Those are just a few questions we’ll be asking about this great new enterprise which the business ability, the organizational ability of the Minister of Finance (Hon. Mr. Barrett) has helped to set up for the benefit of the people of British Columbia, to demonstrate the true level of his expertise which this government brought to the planning of its insurance corporation.

I want to quote some statements from that final authority, the ultimate authority on insurance rates -the Minister of Public Works (Hon. Mr. Hartley). These were the careful calculations that this Minister made in his remarks to the House on January 27, 1972. I’ve headlined this: “Hartley Discovers $25 Car Insurance.” He says:

“The first step, possibly the most simple and easiest step for you to take, would merely be to expand your present programme of government car insurance – the programme that you have for 6,500 government vehicles…” – this is when he’s in the opposition talking to the former government – “…that are now out bucking the snowdrifts driving under the most hazardous conditions night and day at this time of year.”

You know that the Highways report that was filed on January 20, on page 14 (b) gives a report from the government’s own car insurance. Here he states that the former government insured its own vehicles for $23.85. He says:

“We insure all our publicly-owned vehicles that are operated by the government in various government departments for approximately one-eighth to one-tenth of what it would cost if you had insured them through private industry. The total cost for 6,000 vehicles is $125,000.” He said, “If you had insured these through private car insurance corporations, it would have cost $1 million more than that.” He goes on to say: “If they can save $1 million on 6,500 vehicles, what could we do with a thousand times that on 650,000 vehicles?”

The Minister of Public Works (Hon. Mr. Hartley) would save the people of B.C. $1 billion by his own calculations.

Mr. Chabot: He should resign.

Mr. Bennett: Now we hope on this side of the House, Mr. Speaker, that there’s no truth to the ugly rumour that the present insurance Minister is about to be fired. But should it be true, then obviously

[ Page 31 ]

there’s only one choice for the job – the Minister of Public Works. He’s going to save us $1 billion a year. Why, if he was in charge he could clean up this whole mess today. He’s already said there’s no overhead, no building. For $38.50 a year he can insure everyone’s car in B.C. – $23.50. Why isn’t he the Minister of insurance?

And then from his calculations – and this proves the stock that this party held in his financial ability, his wizardry, because before the Premier became Minister of Finance he was the financial wizard of the NDP – they ran his figures in public ads saying: “We will give you $25 car insurance.” Financial wizards.

Then the Minister of Health (Hon. Mr. Cocke) spoke on the automobile insurance bill last spring, and I think it sums up the feeling of all the Members in this House. He said, and I quote, “I would hate to be part of a government that deceived the public.”

Amen, Mr. Speaker. Amen.

Some Hon. Members: Amen.

Mr. Bennett: The blunt fact about the government’s insurance scheme is that it was conceived in deceit, born in confusion, and delivered in chaos. You said, “I would hate to be part of a government that deceived the public.” I’ve read back the statements of your Members. Are you calling them liars? Are you calling your Members I’ve just quoted liars? Are you calling the Members…?

An Hon. Member: Not at all.

Mr. Bennett: Then what’s deceit? And that auto insurance expert, Jes Odam, in the Sun – and he’s made a study of auto insurance – and I quote from him as a final wrap-up. He says:

“Our Premier, with all due respect to him, was talking balderdash, piffle and poppycock.

Many drivers will pay more for auto insurance from this government for a variety of reasons.”

Well, the Premier of this province has tried to draw a red herring across the trail of his broken auto insurance promises by challenging not only the Leader of the Opposition but other party leaders as well to come out against car insurance at the next election. I challenge him to show where I ever came out against government car insurance.

But, more to the point, I promise him that when my party takes over the government, we will bring sound business management to the ICBC and we will bring the end of monopoly of government in the field of automobile insurance. We will establish premium rates not on the basis of politics but on the basis of genuine competition with private insurance companies, developed by the experts.

Now, something about housing. Housing was in the Speech from the Throne, Mr. Speaker. Once more I don’t want you to take my word far it because here you have the word of the Premier for it. Only a couple of months ago he said, “The housing situation has gone from bad to worse.” Bad to terrible during the first year of his administration – bad to terrible -and that it was going to get worse. Well, he was right. He’s finally right. The housing situation did go from bad to worse during the first year of his administration, and it did get terrible, it did get worse.

What we have today in B.C. is a housing crisis. The irony of the situation, Mr. Speaker, is that it never had to happen – broken promises and mistakes. This crisis was largely of this government’s own making. Although the throne speech tells us that during this session we will see some frantic high-cost, big-bureaucracy patchwork efforts to catch up on the crisis, no amount of Band-aid building by Dunhill Development will excuse this government from its total lack of performance in the housing field for the last 18 months.

Mr. Chabot: Even Dunsky can’t advertise them out of that.

Mrs. Jordan: Consumer affairs looking after the huts.

An Hon. Member: They’ll need more than McNelly to move themselves out of that.

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