This week in AB+: November 25, 2024
Albertans are taking on a lot of liabilities; Stephen Harper for AIMCo today, and government insurance coming soon.
Former PM Harper announced as AIMCo board chair
Stephen Harper’s impending return to the political radar was leaked two weeks ago, while Premier Danielle Smith played coy about the news. Official word came down this week, to much fanfare from Harper-stans, and everything from griping to legitimate concerns from everyone else.
Harper has said he will not take a salary for the role which, in 2022, was $90,000 annually, plus $1,000 per meeting attended, which would net an additional $35,000 a year in regular meetings, plus special meetings.
Some people see refusing to accept a salary as a good thing. It’s been done before, most often by independently wealthy individuals who see sharing their expertise as “giving back”. Except AIMCo isn’t a charity, and the role is not seeking a public servant. Further, Harper, despite having dipped his toe into fund management — ostensibly alongside people who actually have a wealth of career experience — doesn’t have “expertise” after a few years in the industry; he has some “experience”.
The other reason people forego a salary are because they are so personally invested, or even obsessed, with something that they are just excited to be involved, and the lack of salary is often a way to compensate for their lack of experience.
The Canadian model of pension management was built on removing political interference from their boards and executive. It is viewed as the gold standard in asset management.
So, obviously Danielle Smith would want to do the opposite.
The UCP’s focus on pension funds hasn’t exactly been a calming force in the province. Smith has repeatedly claimed that the federal governing party (just the liberals, though — not Harper’s party) directs and controls Canada Pension Plan assets; a confounding falsity that Smith probably knew was untrue, at first.
However, Smith is extremely malleable. Through her own repetition of the claim, and having it parroted back at her, she may very well have forgotten that it was just politicians lying to score points, and is now willing to use it to justify directing her own party to do the “same”.
Harper’s appointment, seen almost universally as ideologically motivated, is being treated as a red flag by nine union leaders whose member pensions are mandated to be managed by AIMCo, and make up the bulk of AIMCo’s assets.
In an open letter to the Alberta government after Harper’s appointment was confirmed, unions are demanding their own representatives have a board seat as well; something else the Canadian model stayed away from by remaining arm’s length from political influence.
They say two wrongs don’t make a right, but in Alberta it looks like we will have the opportunity to see how many wrongs it takes to get back to a gold standard from wherever it is we’re going.
Alberta auto insurers get green light on rate increases
Apparently the implementation of “no-fault insurance” will require an increase of as much as 7.5 per cent each year for the next two years, after which time rates may decrease by as much as 10 per cent while coverage decreases a lot more.
Emphasis mine, because I don’t believe prices ever go back down when there’s a profit motive. People complain, adjust, and carry on. There’s nothing else they can actually do about rising costs aside from refusing to pay their bills — but that only works for the Alberta government and junior oil and gas companies. I digress.
Don’t expect the UCP to come to your defence.
“Albertans want no-fault insurance,” Finance Minister Nate Horner said during question period on November 21.
Well, Albertan insurance companies do, and that’s all that really matters. They’re the ones with the lobbyists; we just elect people who are supposed to represent our interests. Again, I digress.
“No-fault” is a misnomer. Despite the obvious interpretation of those words, it doesn’t mean that no fault is to be found; rather, it means that the insurance company assumes less liability for the mistakes of those they “insure”.
“Less liability” insurance might send the wrong message, though, and “less-coverage” insurance is probably too precise to be marketable.
However, your insurer will only pay if you are not at fault. If you contributed to the accident, your compensation is directly proportional to your degree of responsibility. For example, suppose you are 25 percent at fault for the accident. Your insurer will only cover 75 percent of the costs to repair your vehicle. (para 8)
Moreover, your insurer will determine fault based on provincial rules like Regulation 668 of Ontario’s Insurance Act. The police report is important, but it is not the final word. It cannot supersede the insurance company’s findings. (para 9)
Fun times!
Even if the police report says you were not at fault, the insurance company can try to find a way to spread some of that fault around.
Imagine a situation where you are stopped at a light in the righthand lane, at least one car length behind the vehicle ahead of you, and someone behind you who wasn’t paying the best attention hits their brakes too hard and slides into your vehicle. They try to veer to the right and end up hitting your vehicle’s right bumper, but that forward motion now pushes the back end of your vehicle to the left, which slams into the person who was idling peacefully beside you.
Your insurance company is probably going to cover the damage from the initial collision because you were (probably) not at fault. To determine fault on the second collision, however, they might want to look closer at how they can reduce their liability, by, say, closer inspection of the state of your winter tires.
You cannot claim full compensation for property damage if you are at fault. It also limits your ability to sue for pain and suffering. (para 22)
PLPD (public liability, public damage) is currently the least expensive coverage a driver can maintain in Alberta. It offers no coverage for you personally, even if you are not at fault (here’s hoping the other guy had insurance!), but ensures that if you are at fault, coverage exists for the damage you may cause.
With “no-fault insurance”, you won’t have any coverage to speak of. My expectation is that this bare minimum coverage will no longer be offered as there’s no point to it under an “insurance” system that relies on supplying less coverage.
That’ll hit the young people’s bank accounts hardest, since they tend to have less expensive vehicles and opt for less insurance coverage, as well as anyone who is struggling with affordability, of course.
Smith said last week that this last gasp for higher premiums for two years “is the end of the line” and “it’s up to the industry to make this work.” Scoff.
I’ll wager a lot of money that conservative insiders weren’t lobbying the Alberta government to “make this work”.
Smith is allowing them to raise rates for the next two years and “threatening” that the next step her government will take is assuming all risk and liability by creating government insurance.
To my ears, it sounds more like “smoke ‘em if you got ‘em!”
Premier Smith and Finance Minister Horner are claiming the purpose of this next couple years of increases is to be “a light at the end of the tunnel” for insurance companies to stick around.
Sure, if the “light at the end of the tunnel” is that, in two years, the Alberta government will assume all risk and liability for housing and car insurance.
I’ve been saying this has to happen for a while. There’s no other option.
At least the UCP is going to be the one convincing Albertans that public insurance isn’t socialist — it’s just what happens when individuals can no longer profit enough from providing public services.
My gut tells me that government coming to the rescue isn’t simply a favour to allow insurance companies to walk away with full pockets, though. I expect there’s going to be a trade for something government currently covers instead: healthcare.
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