Liberals to back NDP’s call for 15% auto insurance cut

Published March 27, 2013

Premier Kathleen Wynne’s minority Liberals will back NDP Leader Andrea Horwath’s bid to lower auto rates, the Star has learned.

In a move that could well avert a spring election, Liberal MPPs are set to support New Democrat MPP Jagmeet Singh’s motion Wednesday calling on Wynne’s government “to gradually reduce average, industry-wide, private passenger auto insurance premiums by 15 per cent.”

While Singh’s opposition-day pitch in the legislature is largely symbolic, the Liberals’ endorsement of it will carry much political significance ahead of next month’s budget.

The New Democrats have given Wynne a shopping list of demands in exchange for support, the highest profile of which is to slash insurance rates that are especially onerous for Greater Toronto motorists.

Finance Minister Charles Sousa, who will table his first budget in mid- to late April, confirmed Tuesday that “it’s in the interest of the public” to make rates fairer.

“I’m looking at options as to how to make this work. I’m deliberating over how to do it,” Sousa said in an interview.

“We will work towards finding ways to make the premiums come down. I welcome the opportunity to work with the (NDP) on this,” he said, noting it requires “cooperation with the industry.”

Almost a decade ago, the Liberals instructed the insurance regulator, Financial Services Commission of Ontario (FSCO) to cut rates by 10 per cent and, in 2004, premiums declined slightly more than that.

Under questioning from Singh in the house on Tuesday, the treasurer agreed that 905 residents are bearing the brunt of the skyrocketing costs.

“We also recognize on this side of the house, as I’m sure you do, that the cost of insurance has gone up even more dramatically than it should. We need to get at those root causes and address the fraud,” said Sousa.

Singh noted the Liberals also made changes to the industry in 2010, halving the cap on payouts for routine claims by accident victims, which saved the insurance industry $2 billion a year.

“Yet in the past two years the premiums that auto insurance drivers pay have gone up 5 per cent,” the Bramalea—Gore—Malton MPP said.

“I’m asking the government today . . . to be on the side of drivers in Ontario by reducing auto insurance premiums by 15 per cent,” said Singh.

“Tomorrow, they have a chance to vote in favour of a motion, which would direct FSCO to encourage 15 per cent reductions in a gradual manner, to reduce rates for insurance for drivers of Ontario.”

The minority Liberals need help from opposition MPPs to survive a confidence vote on Sousa’s budget.

If the spending plan is defeated, Ontario would be plunged into an election costing $92 million and coming less than two years after the October 2011 vote.

While Progressive Conservative Leader Tim Hudak has said his party cannot back Wynne’s Liberals, Horwath is willing to deal as she did last year when the NDP propped up then premier Dalton McGuinty.

Beyond auto insurance changes, Horwath wants the Liberals to guarantee home-care services within a maximum five-day waiting period, subsidize job training for youth, and closed corporate tax loopholes.