News / Vancouver

B.C. orders probe into B.C. Liberals' $1B ICBC 'dumpster fire'

Attorney General says taxpayers 'not told the truth' about the public insurer's sky-high losses

A Lamborghini on fire after crashing on the Sea to Sky Highway south of Whistler, B.C. on May 28, 2016.

Greg Senko / Instagram

A Lamborghini on fire after crashing on the Sea to Sky Highway south of Whistler, B.C. on May 28, 2016.

British Columbia's Attorney General said his B.C. Liberal predecessors left taxpayers on the hook for "quite simply a financial dumpster fire" at the province's public auto insurer.

The Insurance Corporation of B.C. (ICBC) last Thursday revealed it's is on track to lose $1.3 billion in public money this fiscal year alone.

Attorney General Dave Eby said Monday he's ordered an external probe into the agency's financials by Price Waterhouse Coopers (PWC) to get to the bottom of what he deemed "years of reckless decisions by the previous government."

"They knew the dumpster was on fire," Eby alleged, "but they pushed it behind the building rather than put the fire out.

"British Columbians were not told the truth about ICBC … Now British Columbians are facing the full consequences of the previous government hiding the truth."

ICBC, however, attributes the startling annual losses to a spike in car crashes last year and sky-high damages awarded for people's injuries on the roads, with some long-term injury claims finally getting paid out at great expense.

Retired senior civil servant Rick McCandless — whose 35 years in B.C. government included assistant deputy minister and Chief Financial Officer of the Ministry of Attorney General and a senior analyst position on the province's Treasury Board — said Eby's "dumpster fire" metaphor was woefully inadequate.

"Other than hinting at some changes in the spring legislative session and blaming the B.C. Liberalss — rightly so — he didn't say much," McCandless said in a phone interview. "It's a lot more serious than a dumpster fire; the house is burning down.

"The whole place is going broke."

McCandless described ICBC as a "political football" for decades, as governments attempting to rein in insurance rates rising with the agency's costs, subsidizing motorists.

"We're talking about a lot of voters who are car drivers," he noted.

Doing the right thing — in his view, allowing rate increases and moving towards a no-fault system with strict caps on pain-and-suffering pay-outs — would be politically tough.

"It would save tons of money but no politician or party wants to do that," he argued, adding that in Australia they adopted a hybrid insurance system which only allows lawsuits for lifelong impacts, and imposes a deductible. "If you have a permanent injury, you can then sue for pain and suffering, but anything less and you get standard benefits set by their workers' compensation board or the full cost of making you better. Most people do recover."

McCandless also decried the B.C. Liberal government raiding ICBC's profits on its optional insurance products — which he said are "secretive" and "not transparent" — to pay off general debts.

B.C. Attorney General David Eby (MLA for Vancouver-Point Grey) speaks about ICBC losses at a press conference in Vancouver on Monday, Jan. 29, 2018.

David P. Ball/Metro

B.C. Attorney General David Eby (MLA for Vancouver-Point Grey) speaks about ICBC losses at a press conference in Vancouver on Monday, Jan. 29, 2018.

Eby added there may be more to the picture, and called the financial claims of the previous government "astounding" and questionable, and promised further action to not only rein in ICBC's losses but — depending on PWC's findings — further investigation.

In particular, he said the previous government "scrubbed" cost-saving recommendations from a 2014 report it commissioned into the public insurer, but even he can't get access to the uncensored report because it's protected by "Cabinet confidence."

Former transport minister Todd Stone, who oversaw the Crown corporation under the B.C. Liberal government, is currently running for that party's leadership following ex-leader Christy Clark's resignation last summer. Among his rivals: Mike de Jong, former finance minister.

"Cutting pages out of consultant reports to hide the truth … Mr. Stone and Mr. De Jong and other people who were involved in this report not being released to the public have some explanations to give," Eby said.

When asked Monday by Radio NL if he'd allow the report's release said he would but only to Eby: "If Mr. Eby wants to look at a report I don't have any problem with that. There are cabinet document confidences that need to be respected."

B.C. Liberal leadership hopefuls Todd Stone (left) and Mike de Jong appear before a debate in Prince George on Nov. 4, 2017.

Courtesy Twitter/Mike de Jong

B.C. Liberal leadership hopefuls Todd Stone (left) and Mike de Jong appear before a debate in Prince George on Nov. 4, 2017.

But John Yap, the B.C. Liberals' Attorney General critic, accused the B.C. NDP of "trying to distract" the public from their "not taking action" on "challenges" at the insurer, and that the government is trying to place "blame instead of accepting responsibility" for the fiscal problems.

"The threat posed by rising claims and payouts is well-known and the previous government took steps to deal with the issue," Yap said in a press release Monday. "As well, a third-party review of ICBC was ordered by the BC Liberals and was delivered on July 10, so it was waiting on the desk of the new minister.

"Instead of taking the immediate actions the report called for, David Eby has done nothing for seven months except order another review."

However, Eby ruled out moving the province to a "no-fault" insurance model, nor will he consider privatizing the Crown corporation to make it more competitive, arguing it performs a vital public function.

"It is my very clearly stated intention that rates are affordable for British Columbians," he told reporters. "We have to address the system itself."

And despite saying he is considering proposals to improve red light cameras, increase premiums further for "high-risk" drivers, and cap pay-outs for "soft-tissue damage" in collisions, he also vowed to "protect the rights of British Columbians to sue and recover damages through the court system."

McCandless believes that politicians of both major parties are unduly influenced by pressure from trial lawyers — whom he estimates earn at least $500 million a year on claims — and highly paid doctors' often "dueling" medical assessments.

"The NDP is bending over backwards to try to keep the tort system just like the Liberals did," he said. "These people know what has to be done to save a bunch of money but it pisses off a very powerful interest group.

"Eby will probably cap pain and suffering payments like Alberta did, but with a $500,000 cap that's maybe $150 million savings — they've got to find $450 million to close (ICBC's) structural deficit. That's a lot of money."

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