January 15, 1998
CLARK'S PHONEY RATE FREEZE
Leaked ICBC Document Proposes Millions In New Fines, Gas Taxes and Subsidies.
Photo Radar  "Fairness Code" Gutted, Fines Up 113 percent, Photo Radar Units 
Doubled.

VICTORIA/VANCOUVER: On the eve of an announcement extending ICBC's rate 
freeze, Safety by Education Not Speed Enforcement (SENSE) and the Canadian 
Taxpayers Federation (CTF) today jointly released an internal ICBC document 
that recommends the Minister Responsible, Andrew Petter, impose hundreds of 
millions of dollars in new fines, additional gas taxes and even provide direct 
government subsidies to stem to the flow of red ink at the crown monopoly.  
The 100 page document is available from either the SENSE website 
(www.sense.bc.ca) or the CTF website (www.taxpayer.com).  

"Motorists and taxpayers should be wary of the Clark government's phoney rate 
freeze," said CTF provincial director Troy Lanigan.  "The leaked document 
suggests that $185-million in loses at ICBC in the past two years will expand 
to $327-million year ending 1998 (see p. 28) unless dozens of new revenue 
measures are imposed.  Motorists and taxpayers should send ICBC and their 
political masters back to the drawing board and demand an end the political 
interference and deceit governing auto insurance rates in British Columbia."  

Recommendations in the report include:

* Increase insurance rates by as much as 8% (ICBC earns $25-million per 1% 
increase, see p. 28).  RULED OUT BECAUSE OF THE EXTENDED RATE FREEZE TO BE 
ANNOUNCED TODAY;

* Subsidize ICBC by transferring funds from general revenues ($201-million in 
1998, $279-million in 1999, and $278-million in 2000, see p. 18);

* Increase driver penalty points by 5% to as much as 50% (ICBC earns an 
additional $1-million per 5% increase, see pp. 65-66, 82-83);

* Lower threshold for driver penalty points from 4 points to 3 points 
(200,000 single-offence motorists would pay an estimated $25-million in 
extra insurance fines, $65-million if photo radar tickets and seat belt 
infractions are included, see pp. 91-92);

* Increase gas taxes (supported by ICBC Board of Directors but no estimate 
provided, see p. 23);

* Increase vehicle damage information search charge from $15 to $20 
(additional $600,000 in revenue, see p. 56);

* Automatically convict drivers mailed a photo radar ticket if they do not 
respond in 45 days.  Currently, ticket recipients not responding must be 
served.  The report estimates that of the 500,000 tickets expected in 
fiscal 1998/99 fully 125,000 will not be served and likely cancelled.  
Photo radar fine revenue goes to government, not ICBC.  The additional 
revenue is estimated by SENSE at $17 million.  Total revenues to government 
given 500,000 tickets in fiscal 1998/99 is estimated at $75-million, pp. 
62-64);

* Increase Photo Radar Deployment and "Efficiency."  Add 15 to 40 new photo 
radar units to the existing fleet of 30.  "Review police deployment 
practices" including "ending the announcement of unit placement". The 
report highlights to the Minister that "further concerns over the 'fairness 
code' could develop" (see p. 17).  A specific revenue figure is not 
provided but is identified as "significant" (see pp. 59-61, 79-81); 

* Dedicate "night court" to assessing traffic violations (no cost analysis 
but ICBC proposes to fund court costs) (pgs 86-87).

ICBC's communcations plan is to sell the revenue initiatives by promoting that 
"road safety programs are producing some results, but not enough" (see p. 35).

"Their 'enhanced road safety initiatives' are little more revenue-enhancers.  
The motorists of B.C. will not see a needed focus on incompetent drivers or 
fraud, just increased penalties for driving at negligible amounts over posted 
speed limits," said SENSE Director of Research Michael Cain who focused on 
recommendations involving photo radar and the lack of any driver education 
initiatives.  "The document reveals that 30 photo radar vans failed to produce 
the desired speed reduction (pp. 59, 79) or a reduction in claims (p. 10) -- 
what makes ICBC and the government think an additional 40 will make any 
difference?  The only difference it will make is to peoples' wallets."

Under the proposals a base photo radar ticket -- 11km over the speed limit -- 
would increase by 113%:
  Base speeding ticket (1-20km over speed limit):   $100
  Neurotrauma Surcharge:                             $15
  Penalty points:                                   $130
     Total:                                         $245 

The average ticket issued by conventional speed enforcement (21-40 km over 
speed limit) would jump to $303 from $100 one year ago.  
 
Cain and Lanigan did say that several other recommendations in the document 
had merit including:  bodily responsibility charge (a deductible charge to at-
fault parties, see pp. 89-90), airbag recycling (pp. 50-51), increased use of 
recyclable parts (pp. 48-49), "right pricing" which ties premiums to risk 
assessment on the basis of driver experience, location and vehicle type 
(document states that top 65% of drivers "are overpriced by about 20%, while 
the worst risks are underpriced by approximately 40%," see pp. 93-94).  

"Why can't ICBC and the government look at alternatives with the same vigor 
they do speed enforcement?  How about a 100 page report dealing with a crack-
down on fraud which they themselves estimate at 15% of every policy," asked 
Michael Cain.  "Or link penalties like premium points solely to at-fault 
accident claimants since they are already subsidized by good drivers." 

Lanigan added that the document proves how politics drive the agenda of crown 
monopolies like ICBC.  "First rates are arbitrarily frozen by the premier on 
the eve of an election, contributing to successive deficits (see pp. 3, 6).  
Then a rate increase for 1998, which should have been announced in November 
(see p. 34), is held off because of two recall campaigns.  It's time to take 
auto insurance out of the hands of politicians and open the industry to 
competition where decisions are based on the needs of consumers – not 
politicians in Victoria."

                            -----  30  -----

For further information contact:

The document is available from either the SENSE website (www.sense.bc.ca) or 
the CTF website (www.taxpayer.com).  

Troy Lanigan		1-800-699-2282		(250) 388-3660 (in Victoria)
Provincial Director, British Columbia Division
Canadian Taxpayers Federation

Michael Cain, Director of Research
Safety by Education Not Speed Enforcement

Ian Tootill, Executive Director
Safety by Education Not Speed Enforcement