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NDP Leader Andrea Horwath warns of election if auto insurance premiums aren’t cut by 15 per cent

Published March 1, 2013
By Rob Ferguson and Robert Benzie, Queen’s Park Bureau

NDP Leader Andrea Horwath used a meeting with auto insurance executives Friday to step up the pressure on Premier Kathleen Wynne for a 15-per-cent cut in premiums, warning that failure could lead to a spring election.

“We still believe there’s an opportunity to see rates come down,” Horwath said after a one-hour meeting, where she expressed concern that rates haven’t fallen more quickly since benefit payouts were trimmed in 2010 reforms.

“I’ve told the premier what I expect. She knows what I want to see in the budget,” added Horwath, who is also pushing for subsidized job training for youth, closing of corporate tax loopholes, among otherthings.

“If I don’t get what the people of this province deserve in terms of changes that help their problems in this budget, then we will be going to the polls.”

With the Progressive Conservatives under Tim Hudak promising to vote against the budget, Horwath will be in the driver’s seat.

The NDP’s political calculus will also have to measure whether Wynne — who replaced Dalton McGuinty on Feb. 11 — is still enjoying a honeymoon with voters, which could lure wavering New Democrat support to the Liberals.

“I don’t want to see this effort take too long,” Horwath said of the pushto trim insurance rates.

Wynne pledged to work with Horwath on the issue.

“I don’t know what the percentage (drop) is that we could expect,” Wynne said at a cabinet retreat in Sault Ste. Marie, adding Finance Minister Charles Sousa is on the case.

“This is an area where we can work together,” she said, referring to the NDP.

“I hope that we will find a way. Let me be clear, we want to work with the opposition. I have met with Tim Hudak a number of times, I’ve met with Andrea Horwath a number of times.”

However, Wynne, who incorporated opposition ideas into the throne speech, warned that she won’t be a pushover.

“If that’s not enough — if at some point the opposition says, well . . . we don’t want to work with this Liberal government and we don’t believe that we can find common ground . . . then we will take this fine team and we will bring a plan to the people of Ontario that I think will allow us to enter an election in a very strong . . . position,” the premier said.

An election would cost around $92 million and come less than two years after the October 2011 vote.

Auto insurance executives emerged from their private meeting with Horwath saying they have been trying to trim rates but are hamstrung by $1.6 billion a year in auto insurance fraud, such as staged accidents and some for-profit medical clinics padding or faking treatment plans for the injured.

“The system’s broken, it needs to be fixed,” said Steve Kee of the Insurance Bureau of Canada.

“Why is the average claim in Ontario $30,000 and the average claim in Alberta is $3,500? Are we more brittle? I can’t explain that. It means people are targeting the benefit system in this province.”

He said the 2010 reforms were “a great stabilizer” and rates are down 0.26 per cent so far, but the industry still pays out $1.04 in benefits for every $1 in premiums.

“There’s no magic wand that I have to wave and say these rates are going to come down but if we take an approach to reforms, and we’re really serious about this, we can see reduction in cost.”

The government and the industry have teamed up on a report on reducing auto insurance fraud, and Horwath said she supports those efforts.

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