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Among the files the B.C. government has had the most difficulty managing, or the easiest time bungling, depending on your view, the Insurance Corp. of B.C. stands out.

This week in the legislature, NDP Leader John Horgan and fellow New Democrat Adrian Dix laid bare some of the enormous problems at the insurance corporation, and the role the Liberal government has played in creating them.

Mr. Horgan pointed out, for instance, that when the government tabled its budget in 2015, ICBC was projected to have net revenues of $678-million over a three-year period. But in the fiscal plan issued by the Liberals this week, those surpluses have turned into a deficit of $833-million. By any measure, a shocking turn of events.

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"[Transportation Minister Todd Stone's] $1.5-billion blunder is $1,000 a family," Mr. Dix told the legislature. "That's how much it is. How are they supposed to pay for his blunder, for his bad choices?"

The New Democrats always know when they have found a subject upon which the government finds itself vulnerable: the minister responsible gets up and reaches into a dark past decades ago when the NDP was in power and, according to the Liberals, the province was rendered a crumbling, apocalyptic mess that had people fleeing over the Rockies for Alberta. The fact that Mr. Stone decided to take this well-travelled path in response to the New Democrat's completely justified questions was evidence of just how shaky his, and his government's, handling of automobile insurance in B.C. has been.

Mr. Stone really didn't provide much of an explanation as to what happened to the $1.5-billion – the difference between what the corporation was supposed to raise in revenues over three years and what it ended up losing. That is, other to say that there are "underlying challenges" that are driving up costs such as a rise in bodily injury claims.

The situation at ICBC is actually much worse than it appears. At least, that is the view of Richard McCandless, a retired bureaucrat in the B.C. government and an expert on utilities, particularly the insurance corporation.

For instance, when ICBC filed its first-ever, multiyear forecast to the Utilities Commission, most public attention was focused on the 42-per-cent cumulative increase of basic rates from 2016 to 2020. But according to Mr. McCandless, who was an intervenor at the utility hearings, what was missed was the $1.5-billion ICBC indicated it was going to need from "other sources" in order to cover operating costs over that period.

The provincial government does not let ICBC set rates necessary to cover its costs. It suppresses rates, for political reasons, forcing the insurance corporation to raid its reserves to find the money to cover claims and other expenses. But those reserves are now virtually empty – or at least have reached the point below which they can't go, under provincial statute. Mr. McCandless asked the utility to identify these "other sources" that would be used to finance its costs. It refused to reveal them.

Mr. McCandless looks at those forecasted insurance costs over the 2016-20 period differently than the government does, or at least differently than how the government regards them publicly. If you add the $1.5-billion of taxpayers' dollars that are going to be drawn from somewhere, and add it to the 42 per cent in cumulative increases over that time, the hike is really a cumulative 117 per cent (in 2016 dollars) from 2017 to 2020.

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Certainly, many of the problems that have dogged the insurance corporation over the years have been the fault of bad management. But government has contributed to the woes as well. For instance, despite a significant rise in expensive injury claims between 2012 and 2015, the corporation, under orders from Victoria, decided to reduce staff in its claims division. In a misguided attempt to save operating expenditures it created horrible claim backlogs, resulting in $2-billion in basic claim liability.

Only now is ICBC hiring staff again to address this problem.

The auto insurance industry is fraught with problems. Fraud is up. People claiming whiplash from the most minor of fender-benders is up. The cost of fixing the modern automobile is up, the rising price of tin being one of the reasons. It hasn't helped that the B.C. government has also used the corporation as a cash cow over the years too, which has prevented it from investing that money elsewhere.

The government must accept responsibility for the dire circumstances in which ICBC finds itself. The insurance corporation is heading for a cliff but instead of hitting the brakes, the Liberals appear to be helping ICBC step on the gas.

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