The political brinksmanship over the Ontario budget is over, bringing some clarity to the fate of the province’s auto insurance anti-fraud reforms.
“We were concerned that the budget might not pass, as it contained many long-awaited measures to address fraud,” said Insurance Brokers Association of Ontario (IBAO) CEO Randy Carroll. “If the budget did not pass, and the province were to go to an election, the fraud reforms would be put off for at least a year, if not indefinitely.
“The announcement made today will allow all parties to get started on the legislative changes and start working towards the gradual reductions that have been promised.”
Ontario’s opposition NDP Party has agreed to vote in favour of the minority Liberal government’s budget, which contains a commitment to a 15% auto insurance rate cut. The budget also contains a series of legislative measures designed to reduce auto insurance fraud.
“We will pass this budget based in the commitment this government has made and we will remain vigilant to ensure their promises are kept,” NDP leader Andrea Horvath told reporters at Queen’s Park. (continued.)
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“This wasn't easy & the budget doesn't cover everything people need, but we fought hard for results that will help Ontarians,” she later posted on Twitter.
The NDP did manage to get the Liberals to include a commitment in the budget to reduce auto insurance premiums in Ontario by 15%. The government and the opposition have sparred publicly over the timing of the promised auto insurance rate cut, with the government committed to implementing the premium decrease “within a period of time to be prescribed by regulation.”
Since the budget does not include any timelines, brokers report that they are already receiving messages from clients asking when they can expect their premium reduction. Insurance companies and brokers are reminding clients that the proposed reduction is an average across all of the province’s policyholders. Not every driver will receive a 15% cut.
The debate about the timing of the cuts often overshadowed the fact that the government was proposing to introduce legislative measures to curb auto insurance fraud. These measures include the proposed regulation of health care clinics and practitioners, as well as baking the regulatory guidelines for interpreting the new Statutory Accident Benefits Schedule (SABS) into the legislation itself.
These reform measures are intended to curb insurers’ claims costs, allowing insurers to offer lower average auto insurance premiums to consumers.
The IBAO expressed concern for weeks that an election would in fact delay reforms required to reduce auto insurance premiums in the province.
The Liberals have not put a definitive timeline on delivering the 15% cut, emphasizing the introduction of new legislation designed to reduce insurers’ costs through anti-fraud measures.
The opposition NDP, on the other hand, has pushed for the government to have some timeline in place to confirm the government’s commitment to the cut – preferably sooner than later. With the opposition Conservative Party publicly committed to voting against the budget, NDP support for the budget was critical to keep the minority government from toppling and triggering an election.
The NDP finally played its hand on May 21.
