Ontario’s steep liability insurance costs have forced several municipalities to take action before the expenses hurt taxpayers even more.
The cities that comprise Bruce County in southwestern Ontario have voted in support of a resolution by another municipality, Grey Highlands, to address the province’s insurance issues related to joint and several liability.
Due to how joint and several liability works, a municipality found at least 1% liable for an accident could end up paying for the full cost of an award. This operates on the premise that the city has “deep pockets,” since it can tap into taxpayers’ money to pay for the claims. However, this system has led to surging insurance costs for Ontario’s cities, and the amounts paid for the awards have also increased over time.
Grey Highlands passed a resolution which explained that joint and several liability “continues to ask property taxpayers to carry the lion’s share of a damage award when a municipality is found at minimum fault.” The resolution added that thanks to joint and several liability, municipality insurance has continued to rise, “with especially large increases going into 2021.” Those increases, the city said, are “unsustainable and unfair and eat at critical municipal services.”
The motion to support Grey Highlands’ resolution passed unanimously in Bruce County, The Walkerton Herald Times reported.
“It does hurt some municipalities, because we have the ‘deep pockets,’” said Kincardine mayor Anne Eadie. “The Grey Highlands resolution is a good one.”
“I agree with Anne, I’ve heard about this for years and years,” said Northern Bruce Peninsula mayor Milt McIver.
The resolution also lists recommendations by the Association of Municipalities of Ontario to fix the province’s insurance issues. These recommendations include replacing joint and several liability with full proportionate liability, and implementing a cap on awards.
