In November of last year, Premier Danielle Smith stood before United Conservative Party members at the UCP AGM and promised that "Together we will vigorously protect the rights and freedoms of Albertans." Yet later that month, and against the better judgment of a majority of her cabinet ministers, the Premier and her Finance Minister Nate Horner announced at a press conference that effective January 2027, the UCP government no longer will legally require corporations that insure careless motorists to be financially accountable to innocent Albertans those reckless drivers injure. The Honourable Minister explained that the multinational, multi-billion dollar auto insurance industry needs UCP government intervention to grant at-fault drivers' insurers immunity from the legitimate compensation claims of innocent injured victims (as well as a shocking 100+% bump in the premium hike cap as of January 2025) to "somewhat stem the bleeding."
To be clear, Minister Horner was referring to his heartfelt concern about the alleged bleeding of insurers' corporate bottom lines, not for the bleeding of accident victims (mostly women and children) badly hurt by negligent motorists, nor for the blood that will be on his hands when the increase in human road kill that typically accompanies a switch to a no-fault auto insurance system commences here in Alberta just in time for the next provincial election. The impetus for the UCP government's scheme to rate-shock policyholders and eliminate virtually all liability claims by people injured by blameworthy drivers, thus reducing those drivers' incentives to avoid accidents, appears to be the Finance Minister's oft-stated assertion (an evident falsehood) that "there's only one profitable auto insurance company left in Alberta."
The Premier, also blithely unrestrained by the boundaries of truth at the presser, added that premiums are rising because of increasing injury claims costs. Contrary to the Premier's ill-informed contention, in fact while basic premiums have risen by more than 35% since the UCP assumed office in April 2019, a report by economist Jack Mintz (quietly deleted from the Insurance Bureau of Canada's propaganda website -- but not before we grabbed a copy!) shows an over 8% drop in injury claims costs per insured vehicle, from $493 in 2019 down to $453 by the end of 2023. Incidentally, about five years prior to the press conference, while employed as a talk radio shock jock, Smith (whose medical opinions tend to be notoriously bizarre) espoused the addled view that reckless drivers are the real victims, stating "I don’t know anyone who has received a legitimate payout from an injury and I know at least 10 people who feel a fraudulent claim was paid out against them. I just frankly don’t believe most claims of chronic pain and PTSD."
Affordability Minister Nathan Neudorf also was at the press conference.
Recent data from the Auto Insurance Rate Board (AIRB) shows that, contrary to TBF Minister Horner's fallacious statements (including in the Alberta Legislative Assembly during QP late last year), reports of the auto insurance industry's perilous fiscal health have been greatly exaggerated. Accordingly, it is respectfully submitted that the concept of individual ministerial responsibility requires another presser by the TBF Minister and Premier (they can skip inviting the feckless Affordability Minister to this one), at which they withdraw their ill-advised privately delivered no-fault auto insurance plan, deeply apologize to Albertans, and he tenders to her his resignation from the Treasury Board & Finance portfolio (the insurance policy bureaucrats in the TBF Department probably should be sacked as well). Given that this suggestion involves a whopping six job losses including that of the Finance Minister, we take inspiration from Horner's own words at last November's presser when a reporter asked him about the hundreds (perhaps thousands) of people who likely will lose their jobs (including, for example, our firm's senior litigation assistant, a single mom of two kids) if/when the UCP government's planned switch to no-fault takes effect: "We know transition's tough, and we take no comfort in this, but fortunately with an IQ probably in the high double digits (85+) at least, Mr. Horner can adapt and, Premier willing, find work in an area in the same political sector -- maybe a job as parliamentary secretary to the Ag Minister." Short of the Finance Minister's ouster from that position, at a bare minimum the auto insurance law reform file should be transferred to Alberta Justice forthwith, in care of Minister Amery.
The AIRB's 2025 "Market & Trends" mid-year report released a month ago confirms that the average Albertan's auto insurance premium by the middle of last year had increased to just over $1700 per year (significantly lower than the average of $1970 per year in Ontario, a privately delivered hybrid no-fault auto insurance jurisdiction), while overall claims costs per insured vehicle had dropped down to $1271, less than 75% of premium revenues. Notably, insurance lobbyists have referred to this 75% auto loss ratio as the insurance industry's "Perfect World" scenario, where (when combined with a 25% expense ratio), premiums in match claims costs and operating expenses out, leaving all insurer investment income as pure, sweet profit. Historically, insurers operate at an underwriting loss, more than making that up with massive investment income earned on premiums and accumulated capital. The report reiterates that reality doesn't remotely resemble IBC/TBF tall tales of an insurance industry teetering on the brink of bankruptcy due to skyrocketing claims costs and insufficient premium revenues.
The Treasury Board & Finance Ministry's execrable "Nate's-Fault Insurance" plan, apparently cooked up by a handful of unaccountable insurance policy bureaucrats and fed to the dupable farmer from Pollockville, is staggeringly unpopular with Albertans, who strongly support rights and freedoms and the fundamental principles of responsibility and accountability. A generation ago, when callous Finance department bureaucrats were trying (unsuccessfully) to hoodwink the Klein government into capping at $2500 pain and suffering compensation for Albertans with car crash injuries just short of catastrophic, courageous lawyer and Conservative backbencher Brent Rathgeber said “I appreciate that the bureaucrats at the Department of Finance have limited interest in an unbiased and objective analysis; however we as politicians MUST insist on objectivity and fairness both in process and result.”
UCP MLAs today would do well to heed Rathgeber's sage guidance (fun fact: "Rathgeber" is German for "giver of wise advice") and insist that Danielle Smith not be led by the nose by TBF bureaucrats on this file, and instead listen to her caucus and to Albertans generally. Innocent Albertans injured by reckless drivers (such as former Conservative MP Kerry Diotte's wife Clare) deserve the right to full and fair compensation from at-fault drivers' insurers. The UCP government's no-fault plan rips away rights and freedoms from vulnerable injured Albertans. Many Albertans who voted UCP in 2023 (such as the author of this blog post) Won't Get Fooled Again in 2027 if the government neglects to turf this no-fault idea. Bluntly put, UCP politicians will pay a price at the polls for this preposterous plan if they don't dump it, given that Hell hath no fury like a conservative base scorned by its UCP premier.
It is very unfortunate for ordinary Albertans that Premier Smith, who talked the talk about standing up to Big Insurance, didn't walk the walk when auto insurers issued their empty threat to vacate en masse if she didn't turn tail and bend over for them. She should have called their ludicrous bluff and told insurance execs not to let the door hit their pasty white hineys on the way out of Alberta. Instead, at a pivotal fork in the road to auto insurance reform, the Premier veered left, likely as a result of wrong directions from her Finance Minister and the unelected minions in his department. Lawyer Rob Anderson (who it came to pass was named the Premier's Chief of Staff in the latter days of last year) should counsel Smith with a word of wisdom to exercise sober second thought -- to reverse course and choose the right.
Under the reprehensible UCP scheme, rates rise and rights are removed, a lose-lose proposition for Albertans. Insurance companies, on the other hand, will laugh all the way to the bank, pausing only to make snow angels in their piles of plundered profit, until perhaps the populace picks a party leader who favours people over profits to begin his purple reign as premier. That said, there is plenty of runway before 2027, and if the current regime has any common decency and, failing that, self-preservation instinct whatsoever, it will come to its senses and slam on the brakes. The UCP government is driving the wrong way on this file, but a Calgary Herald guest column published last July provides a road map to the off-ramp, a nuanced plan to reduce rates for good Alberta motorists while preserving rights (in accordance with the Canadian Charter of Rights and Freedoms) within our existing accountability-based tort law system. Let's zoom in on that road map right now, looking at a plan from someone with a clue, along with the anticipated impact on premiums:
The Accident Victims/Insurance Policyholders Advocate (AVIPA) Plan
1. Replace the AIRB's current target profit provision benchmark with an "Insurance Industry Perfect World" 75% auto loss ratio benchmark target, and order insurers who gouge Alberta policyholders to issue refunds. $75/yr savings
2. De-index the Minor Injury Regulation compensation cap, reduce it by nearly 20% to $5000, take injuries covered by the MIR (about 80% of claims) out of the tort system, and permit motorists who want compensation for those injuries the option of purchasing that coverage from their own insurers. $100/yr savings
3. Eliminate the hidden 4% insurance premium tax and slash the health cost recovery levy. $90/yr savings
4. Modify the Grid Program which forces good drivers to oversubsidize the rates of bad ones. $65/yr savings
5. Allow optional collision/comprehensive coverage for repairs with basic or after-market parts. $40/yr savings
6. Reduce compulsory Section B medical expense benefits from $50,000 to $10,000 and total disability benefits from 104 weeks to 26 weeks, and permit auto insurers to sell optional excess Section B coverage (just as insurers can sell excess Section A liability coverage over and above the mandatory minimum and can sell consumers optional Section C collision coverage). $30/yr savings
7. Require insurers to pay into a risk sharing pool to establish a monetary fund to fully and fairly compensate catastrophically injured victims of underinsured motorists. $40/yr COST
8. While the UCP doesn't seem to give a fiddler's fart -- and occasionally (READ THIS CAREFULLY) outright lies -- about the opinions of Albertans, if it at least gives a rat's ass about the views of its own party membership, then in accordance with a motion passed by members at the 2023 UCP AGM, the imbecilic DCPD program enacted the previous year should be repealed without further delay. Premier Smith herself has said the DCPD policy should be revisited, but then apparently became distracted about chemtrails or some such lunacy and plum forgot about that worthy idea. $30/yr savings
9. Pre-judgment interest (set last year at 5.15%, this year at 4.26%) is payable on general damages for pain and suffering. Reduce PJI on generals to zero. $40/yr savings
10. Incentivize the use of winter tires from November to March, command capital city cops to investigate car crashes again now that Chief Wiggum is leaving EPS to accept a sweet patronage plum, increase penalties for grand theft auto (OK, the feds have to do that one), traffic violations and for uninsured driving, implement an insurance validation program to enable police to confirm drivers’ insurance status at roadside, enact an automatic 25% contributory negligence reduction for failure to wear a seatbelt, codify a discount rate for future damage calculations so as to eliminate the necessity of obtaining expensive expert economist reports on each individual case, and legislate a waiver of Schedule C costs payable on motor vehicle accident (MVA) claims settled before a Statement of Defence is filed. $30/yr savings
11. Slash bloated brokerage commissions and inflated insurance industry C-suite remuneration by one third. Enough already with this naked profiteering on the backs of consumers, brazenly masquerading as insurance industry “operational expenses”. $40/yr savings
12. Cap lawyer contingency fees at 33%, eliminate all lawyer television and billboard ads, and charge lawyers a levy (payable from the savings on legal advertising) to be deposited into a slush fund to cover the cost of luxury skybox seats at Oilers games for the Premier, Minister Horner and other interested UCP cabinet ministers for anytime either the legislature is in session or during the playoffs. An added bonus is that the games won't take so long without all those TV timeouts for Diamond & Diamond commercials (which feature three lawyers who practice in Toronto, not Alberta). $0/yr savings, but a nod and a wink to the current government that we get how politics in Alberta works these days.
Most of these thoughtful, conservative, constitutionally valid McCourt proposals (AVIPA reforms) were personally provided to the Honourable Finance Minister by this firm over a year ago, but perhaps nobody read them to him (explaining the legal words) back then. Listen, we realize that it would go against character for the UCP to favour severely normal Albertans over auto insurance corporations: literally from day one, when the UCP was elected in April 2019 and the party's campaign chair immediately was hired by the Insurance Bureau of Canada as its chief Alberta lobbyist, our provincial government has supported the interests of Ontario-based insurance lobbyists over the rights of ordinary Albertans.
That said, we remember a time when Danielle Smith used to have the good sense to ask our principal counsel whether screwing over victims in favour of a Saskatchewan/Manitoba-style no-fault insurance scheme would be a good idea (hint: the answer is no); a time when Smith comprehended the fact that a 12-point list of suggestions from McCourt's Accident Victims/Insurance Policyholders Advocate is a superior source of cost savings that can be more easily, and fairly, implemented than some unprincipled and odorous scheme hatched by a handful of unelected insurance policy bureaucrats behind closed doors in some backroom in the Finance department. Back then, Premier Ralph Klein had his ear to the ground, listened to the judicious counsel of his caucus (over that of a less astute Finance Ministry), respected the opinions of conservative Albertans including Danielle Smith, and wisely changed course on the Tory tort deform file.
Danielle was right back then when she stated that it is immoral for a government to rip away the longstanding compensation rights of innocent victims with serious injuries caused by reckless drivers. With that as a basis, she should make an urgent U-turn, scrap the UCP's odious no-fault plan, and establish an AVIPA Reforms/McCourt Proposals Implementation Team consisting of ARMPIT Chair Brent Rathgeber KC (currently VP Legal of the Alberta Insurance Council) and former Justice Ministers Jonathan Denis KC and Kaycee Madu KC to shepherd in this new and vastly superior auto insurance plan ASAP.
If UCP doesn't accept the AVIPA plan which could save Albertans up to $500 per year on their car insurance, the NDP should adopt this plan and combine it with a) relocating Danielle Smith back to her previous position of Official Opposition Leader (a job in which she has much more experience and is possibly better suited) and b) booting private auto insurers out of the province in favour of a non-profit public auto insurance corporation. Publicly-delivered auto insurance would save Albertans upwards of an additional $350 - $400/yr on insurance rates, although admittedly, some of that anticipated savings would overlap with the savings outlined in the dozen suggestions in the AVIPA Plan above. Conservatively, however, our current auto accident tort law system reformed with these new, democratic, "made-in-Alberta" solutions and delivered by a non-profit public insurer would likely save the average good Alberta motorist somewhere in the range of $60 per month ($720/yr) on their car insurance premiums.
Full disclosure: atrocious drivers probably would see their rights rise under the AVIPA plan outlined above. However, we also have a list of suggestions for those motorists:
1. Drive better; and/or
2. Buy a bus pass.
About the author of this blog post: McCourt Law Offices founder Mark McCourt's scholarly articles on Charter of Rights and Freedoms law have been published in the Alberta Law Review, Manitoba Law Journal, Legal Medical Quarterly and Canadian Family Law Quarterly. After working in the Constitutional Law Section of the Alberta Attorney General's Office, Mr. McCourt has practiced auto accident injury law over 33 years longer than Danielle Smith and Nate Horner (oh, and that Neudorf guy) combined. He was named one of Alberta's 50 Most Influential People soon after establishing the Accident Victims/Insurance Policyholders Advocate (AVIPA) 22 years ago. A former card-carrying UCP member (until last year, for obvious reasons), he has never voted NDP federally or provincially in the 40 years he's been of voting age -- but be assured that "perfect record" will come to an end in 2027 if the current Alberta government doesn't reverse course on this important matter.