The following press release was issued today to news media by our firm founder and principal counsel, Mark McCourt:
Happy New Year, ladies and gentlemen. In 1974, the Canadian Bar Association passed a resolution still in place today: “Be it resolved that the right of an individual to recover general damages from the wrongdoer in motor vehicle accident cases and to have such right adjudicated in the courts is one of the most vital hallmarks of the Canadian system of justice.” Fifty years later, the United Conservative Party government served notice of its intention to obliterate in Alberta MVA cases that age-old right of citizens to seek remedy from the courts for wrongs perpetrated against them, a freedom dating back to the Magna Carta in the year 1215. With the lawyers out of the way, the insurers (who've for years been lobbying pliable politicians in the UCP for what they euphemistically call "More Care, Less Court") will play!
Specifically, the Alberta government announced late last year that effective January 1, 2027, innocent Albertans injured in motor vehicle accidents will no longer be entitled to compensation from careless drivers' insurance companies unless the at-fault motorist is convicted of a crime or severe traffic offence leading to the collision -- which almost never happens in Edmonton and a few other Alberta cities where police have largely abdicated their duty to investigate car crashes, leaving that to insurance industry controlled Collision Reporting Centres. Instead, Albertans will have to rely on their own insurance coverage under a no-fault system administered by profit-driven private auto insurers such as Intact Insurance, the market share leader in Alberta auto, whose stock is trading at all-time highs and whose CEO rakes in over 15 million bucks a year.
While the bad news is that rights are being removed, the other bad news is that rates are rising at an even steeper incline than before the announcement was made. If it's any consolation, Insurance Bureau of Canada (IBC) lobbyists for the multinational, multi-billion dollar Alberta auto insurance industry seem pretty jazzed that the UCP government is ripping rights away from vulnerable Albertans and making our premiums substantially less affordable, so there's that.
Let’s be clear: proponents of no-fault insurance believe that an innocent seven year old girl named Rebecca, mowed down in a marked crosswalk, doesn’t deserve full and fair compensation for her pain and suffering from the reckless driver’s insurance company. "After all," these no-fault fools must muse, "she didn't lose income or have to pay out of her own pocket for the months of therapy she needed to treat her physical injuries and psychological trauma." This is unjust and immoral. Do these no-fault fans have no compassion? Do they not have children of their own?
At the press conference announcing the no-fault scheme, Finance Minister Nate Horner astonishingly alleged (with only the slightest hint of a smirk) that the plan aligns with results of an online government survey of over 16,000 Albertans between April 26 - June 26/24, stating that "while 73% believe it is important to retain the ability to sue an at-fault driver, 60% said that they would not need the right to sue if the benefits provided by their insurance company supported their needs." Displaying a scorching case of integrity deficiency, the Pollockville farmer who became our Finance Minister a year and a half ago neglected to mention that the survey's very next question found that only 40% of Albertans trust their insurance company to provide the support they need if they're injured by a reckless driver -- and that's now, when there are lawyers prepared to go to bat for you against your insurer on a pro bono basis.
In its taxpayer-funded barrage of propaganda after the announcement, Horner's Finance department has employed political doublespeak to bill this disaster as "Care First. Relief for car insurance is coming." The principle of truth in advertising demands this correction: "Don't care. Relief for car insurers is coming." There Nate, fixed it for you.
Albertans believe in rights and responsibilities, and thus are strongly opposed to this no-fault proposal. I suspect most muzzled UCP MLAs know this unAlbertan proposal stinks. Frankly, UCP caucus members who aren't morally bankrupt should find the huevos to emulate Brent Rathgeber and Thomas Lukaszuk, two PC MLAs who a generation ago were courageous and outspoken advocates on behalf of victims and policyholders against their own government's tort deform proposals.
No-fault, which removes the rights of innocent Albertans to recover injury compensation from the insurers of drivers responsible for car crashes, violates principles of fundamental justice. This file should be in the hands of Justice Minister Mickey Amery rather than Finance Minister Horner, who appears disturbingly unconcerned with justice and accountability and solely concerned with securing a cheaper pink card.
Two years ago, Premier Danielle Smith's UCP government slapped a 0% rate FREEZE on premiums for all drivers (good and bad), and auto insurance rates in 2023 went up 5.25% anyway, because insurance companies find their way around these lax UCP regulations. Heck, the Auto Insurance Rate Board is supposed to limit auto insurer profits, and by the AIRB's own admission, those profits have exceeded the AIRB's target benchmarks in three ('20, '21 & '23) of the last four years (2024 results not yet available), resulting in billions of dollars of windfall insurance industry profits. Therefore, it doesn't take a rocket surgeon to figure out that in spite of last year's 3.7% "good driver" rate cap and the 7.5% "good driver" rate cap in each of '25 & '26, premium hikes will significantly exceed those paper guardrails, which have loopholes big enough to drive a clown convoy of bouncy castle-laden semi-trailers through. Honk honk! For example, obviously the good driver rate cap doesn't apply to bad drivers (whose premiums will skyrocket over the next two years before briefly dipping in 2027), but nor does it apply to good drivers who change their address or vehicle or even switch insurance companies -- defeating the purpose of a competitive, "shop around" marketplace of multiple insurance providers, as opposed to one non-profit public insurer. For comparison, please note that Alberta auto insurance rates rose by a little over 2.5% per year during the four years the NDP was in power.
The decidedly UnConservative Party government's asinine plan essentially lifts the no-fault benefits schedule from NDP Manitoba (with minor inflationary modifications), where annual premiums are about $400 lower on average than here in Alberta. However, $389 of that $400 difference in rates is because Manitoba has a monopolistic non-profit government-run insurance provider. And guess what? Auto insurance is not just about price, it's about the value of the product you are purchasing: the average claim payout under Manitoba's kajillion bajillion dollar benefits no-fault system is $4623. Under Alberta's current tort law system, the average claim size is $14,287, over three times higher than in Manitoba. So by all means, if you've got a chubby for that Manitoba policy pricetag, feel free to flee to Flin Flon, just don't get in a car crash and actually have to use that bargain basement insurance policy -- because MPI Autopac's fantabulous no-fault benefits look pretty on paper but are chump change in practice. If you wish to, kindly confirm the Manitoba experience with one of the auto accident injury lawyers in that province -- oh wait, there aren't any!
As for the Finance Minister's flaccid promise, chock-full of weasel words, that Albertans "might see" an "up to" $400 average drop in rates in 2027, ie. after hikes in 2024, 2025 & 2026 on top of the 35% hike from April 2019 (you know, when the UCP assumed office) to December 2023 (during which span, by the way, bodily injury claims costs per insured vehicle decreased by over 8%), here's a dose of reality: most claim payouts in 2027 will still be for car crashes which occur before the scheduled January 2027 no-fault implementation, so insurers undoubtedly will argue that they can't reduce rates quite yet until those outstanding claims are resolved. Even Premier (fun fact: cool kids in cabinet and caucus don't say "the Premier", just "Premier") admitted in the presser announcing the deforms last year that after this odious no-fault scheme is implemented two years from now, it's totally up to private insurers to reduce rates or not, and it will still "take some time for the changes to make an impact" on premiums (somewhat reminiscent of Premier's pre-2023 election promise to reduce Albertans' personal income taxes -- yeah, still waiting on that one in 2025). As for benefits payments made under the no-fault regime, with its illusory gold-plated coverage, the fact of the matter is insurers are going to trot down to Office Depot and buy up all of the "DENIED" rubber stamps in stock -- and they're going to do that for a couple of reasons:
1) With pesky injury lawyers out of the way, NOBODY will be around to ensure that insurers play nice. A Genie grants a no-fault proponent three wishes. "I wish to get rid of the lawyers," says the misguided no-fault fan. "Done. You have no more wishes," says the Genie. "But you said three," protests the no-fault fool. "Sue me," says the Genie.
2) Auto insurance corporations, obviously in business to make profit, are being told by the Premier and her FinMin that they'd better deliver savings during the election year ('27) or by golly, maybe the UCP will boot out the private insurers and bring in public auto insurance. The only way premiums will go down is by cutting claimants off ASAP -- "Pretty basic math," as Nate Horner would say.
By the way, Alberta's standard auto policy already has compulsory no-fault benefits (Section B). Twenty years ago, when the government hiked Section B medical expense benefits from $10,000 to $50,000 and claimed that the bump would likely double no-fault payments made for injured people's treatments, Section B payouts actually went down by 10%. Clearly, and as even the insurance lobby admits, increasing so-called "care-first" or "enhanced care" no-fault benefits on paper doesn't translate into an increase in actual benefits payments. How about them magic beans?
Fully half of Canada's provinces including Alberta currently operate under an auto accident tort law system in which an at-fault motorist's insurer is accountable to compensate the victims of that reckless driver for their pain, suffering and other losses. If Premier Smith's government unwisely moves to a no-fault scheme as planned, good Alberta motorists will see their rates rise and their rights removed. Bad drivers will get increased benefits on paper and be unjustly enriched by a generous albeit fleeting reduction in their premiums. Insurance companies for careless drivers will laugh all the way to the bank, because they'll no longer have to pay pain and suffering compensation to the innocent Albertans wrongfully injured by those negligent motorists. As for those "increased" benefits, let me reiterate that insurers won't really pay more than a fraction of those benefits.
And btdubs, if the UCP government is essentially eliminating from Alberta traffic accident injury law the basic moral principle of civil legal liability for harming others, why on earth would auto insurance be mandatory anymore? Why force Albertans to buy what's left (rather than offering these enhanced benefits optionally), which basically is just self-care insurance that many Albertans don't desire or require? No thanks Dani, I don't need a nanny! Why force an Alberta senior to buy income replacement insurance (good to age 65, scout's honour!) or force someone with extended health care coverage through a group plan at work to buy no-fault medical benefits he or she already has? Isn't the Premier pro-choice? Reminds me of when my home insurer told me I had to carry $100,000 coverage for my out buildings (whatever the hell those are). "But I don't have any out buildings," I said. "TFB," said the insurance agent (I'm probably paraphrasing a smidge). "Fine," I said, and then immediately quipped, "Omigosh, my out buildings -- they're gone!!! Please make that $100K cheque payable to Mark McCourt." The insurer chuckled (insurers, who will always make money including a fortune in investment profits, are always in a very good mood).
If insurers do manage to deliver a temporary (until as soon as the 2027 election is over) $400 average rate drop in this move from our existing accountability-based tort law system over to no-fault, it'll be by hiking premiums for the 80% of good Alberta motorists by about $125 in '27 (on top of the previous hikes from 2019-26) and slashing premiums by $2500ish for the 20% of bad drivers, whose insurers will no longer be financially liable to the victims those reckless drivers maim or kill. Guess what that "averages" out to (I'll wait for you to grab a calculator or the back of a napkin). Basic math, Nate! Of course, given that (as renowned Alberta economists Dr. Jack Mintz and Dr. Chris Bruce have repeatedly warned the UCP) no-fault inevitably leads to more dead people on the roads (perhaps "acceptable collateral damage" in the ill-advised opinion of our Honourable Premier), those reductions will be fleeting, because increased road carnage leads to increased premiums. All together now: Basic Math!
What's truly gross is that the real reason the UCP government is ripping away rights and freedoms from vulnerable Albertans hurt by reckless drivers, as the Finance Minister perhaps inadvertently revealed at the notorious Nov. 21/24 presser, is to keep collision and comprehensive coverage as cheap as possible for well-heeled owners of "nicer vehicles" such as "a $100,000 pickup truck". Horner noted that "the hailstorm in Calgary was a billion dollars in auto... it hit one of the parking lots at the airport. It's probably one of the most expensive airport parking lots you could hit with a hailstorm outside of Dubai." By the way, do you think Nate knows that Alberta auto insurers likely won't be out of pocket for more than a fraction of that $900M hailstorm bill, because insurance companies actually have their own insurance coverage (called "NatCat Reinsurance") for that sort of thing?
And as for the one in a million, worst case scenario catastrophically injured claimant hurt by an underinsured reckless driver, an obvious solution is to legislate a requirement that Alberta auto insurers participate in a risk sharing pool to provide the extra compensation necessary for the lifelong care of those unfortunate claimants. Amazing how an issue such as this can be solved by an expert wielding a scalpel much less intrusively than by a gormless TBF bureaucrat swinging a sledgehammer, amirite? You're welcome.
I predicted on Danielle Smith's birthday (April Fools Day!) last year that if her government proceeds with no-fault, it will lead to mutually assured destruction of the personal injury bar, the UCP government and the private auto insurance industry in Alberta, in that order. The BC NDP came within a whisker of losing the election last October in part because of the unending barrage of horror stories about British Columbians being screwed by the no-fault system implemented there four years ago. Unless the UCP slams the brakes on this no-fault scheme and reverses course, NDP leader Naheed Nenshi will have a field day in October 2027 asking Albertans (who by then will have essentially zero rights to compensation from the insurers of negligent drivers who injure them): "Are you paying higher auto insurance premiums today than you paid in 2024? Are those rates now approaching double what you paid under an Alberta NDP government that valued people over profits, back in that bygone era when the system provided you the right to full and fair compensation if injured by a reckless driver?"
Nenshi has called the repugnant Smith-Horner proposal the “worst possible option” and he’s not wrong: Ontario operates under a somewhat similar privately delivered hybrid no-fault system and has the highest auto insurance premiums in the nation. And in Ontario, your insurance company, not you and your doctor, decides what treatment is best for you. Anyone who has had to deal with a WCB claim has sampled merely a tiny amuse-bouche of what it will be like under no-fault insurance delivered by private corporations beholden to shareholders and not to injured Albertans.
At the UCP government's press conference announcing this "worst possible option" insurance deform, the Honourable Finance Minister asked "What is the alternative?" Thanks for asking, Nate; better late than never! Danielle Smith is well aware of nuanced, conservative "made-in-Alberta solutions" within the existing tort law system that would bring down the average Albertan's auto insurance premium by an estimated $325 - $385 per year, with most of those savings being enjoyed by good Alberta motorists rather than by bad drivers.
Of course, a couple of these thoughtful, economically sound proposals (scrapping the insurance premium tax and reversing last year's ridiculous 60% hike to the health cost recovery levy) would require the UCP to be more than merely conservative in name only rather than doing a spot-on impression of tax 'n' spend liberals. Bluntly, the UCP government would have to stop being part of the problem and start being part of the solution, which doesn't exactly seem to be muscle memory for this bunch.
And by the way, most of these proposed solutions (which I personally provided our evidently forgetful CINO Finance Minister nearly a year ago) could be implemented long before 2027 and are preferred by both the insurance industry and victims' rights advocates over the TBF bureaucracy's ill-advised no-fault plot. As a matter of fact (and perhaps this is burying the lede), more than 7 months ago the Alberta Civil Trial Lawyers Association alerted Premier Smith, her executive director (now chief of staff) Rob Anderson, Finance Minister Horner, Affordability Minister Nathan Neudorf and the rest of UCP caucus that stakeholders on both sides (ie., representatives of accident victims/policyholders and the auto insurance industry) had successfully crafted joint ACTLA/IBC recommendations to markedly reduce rates for good Alberta motorists by reforms within the existing MVA tort law system. The fact that those well-grounded recommendations were presented to government and were unjustifiably ignored, thanks to atrocious advice from unelected bureaucrats, should be broadcast loudly and clearly. Whether it will be, with certain media and a significant segment of our population possessing what a former Deputy Premier recently described as "a very high level of tolerance for corruption", is another matter altogether.
Combining these ideas with public insurance would roughly DOUBLE the estimated premium savings figures for the average Albertan to about $700 per year. For decades, BC had a full tort system publicly delivered with premium increases appreciably below the general inflation rate (especially when ICBC was operating under McCourt management) until discord, disorder and bad government drove it into a ditch and switched to no-fault. My advice to Mr. Nenshi: the winning combination antidote to the UCP's "worst possible option" privately delivered no-fault plan is its "best possible option" opposite: a publicly delivered tort law system. As the NDP leader has noted, while the one time start-up cost to create a public auto insurer in Alberta would be an estimated $3B, the annual savings to policyholders would exceed $1.5B. Pro-tip, people: a 50+% annual ROI is a no brainer.
This isn't my first rodeo, folks. I've been practicing auto accident injury law for over 33 years and can assure you that over 99% of claims in which victims are represented by a lawyer already settle out of court in our existing tort system, but for fair compensation (as opposed to the pennies on the dollar unrepresented claimants typically receive from insurers). Contrary to the BS spewed by Finance Minister Horner that something approaching 20% of premiums goes to insurer legal costs under our current tort law system, in fact insurers spend about 1.6% of premiums (according to data from the insurance industry) on defence lawyer fees opposing lawsuits brought by injured victims of negligent drivers. As even our math whiz FinMin can comprehend, that's about 92% lower than the nonsense blathered by certain hapless UCP politicos.
Similarly, when Nate repeatedly states to media and in the legislative assembly that there's only one profitable auto insurer left in Alberta in spite of his own department's documents to the contrary, one might reasonably wonder if he's intentionally lying or just profoundly misinformed on this issue. Either way, there's ample reason that a year ago I titled my blog post "Lies, Damn Lies and Insurance Lobby Talking Points." Put simply, when the Premier's and the Finance Minister's lips move on this subject, there's an excellent chance that the insurance lobby talking points being dutifully parroted by these two politicians are "not germane to the enterprise of describing reality."
Twenty years ago, I was named one of Alberta's 50 Most Influential people for my audacious advocacy against insurers who were pleading poverty while in fact raking in record high profits (gotsta say, feels a bit now like deja vu all over again) and begging for government intervention to protect the poor, malnourished auto insurance industry from injured car crash victims (mostly women and children) and their counsel.
Interestingly enough, two decades ago a key ally in my battle was an influential TV news host and newspaper columnist by the name of Danielle Smith. As host of the nationally broadcast TV show Global Sunday, Danielle asked me if victims should be sacrificed at the alter in a crusade for lower premiums and I responded that "Saskatchewan and Manitoba might have a little bit cheaper auto insurance but you are paying for a far inferior product in those two prairie provinces than would be the case in Alberta, for example." My co-panellist on the show, Mark Yakubuski (who later became IBC CEO, a position currently held by Jason Kenney's former press secretary), agreed with my response.
And in her column, Danielle absolutely excoriated then-Finance Minister Patricia Nelson's plan to rip rights away from injured auto accident victims in a bid to reduce rates for the young and the reckless (including Pat's dear son Troy), and suggested that the government of the day should instead listen to me and consider thoughtful solutions outlined by my group, the Accident Victims/Insurance Policyholders Advocate (AVIPA). To the Klein government's credit, it indeed did change direction on the tort deform file the day after Smith's column was published. My oh my, Danielle certainly has changed her tune on this issue since then. For shame.
With fully two years before the planned implementation date of this repugnant no-fault plan, there is plenty of runway for Premier Smith's UCP government to exit the road to ruin, which has Team UCP headed straight off a cliff. Sooner rather than later, the government should look at the road map provided in the form of none other than Danielle Smith's eloquent 2003 Calgary Herald article on Tory tort deform, and take the off-ramp! My advice (and I'm quite certain I know what I'm talking about): Danielle should channel her inner Ralph, exercise sober second thought, apologize to Albertans and make an emergency U-turn on this file.
Failing that, by the time the next Alberta election rolls around, President Trump undoubtedly will have made America greater again, and maybe I'll be living in the good old US of A, managing a Cinnabon in Omaha, Nebraska. Kthxbye.
About the author: After being admitted to University of Alberta Law school in 1987 on the strength of a U of A political science degree with distinction and a 95th percentile LSAT score, Mark McCourt earned his law degree 35 years ago and founded auto accident injury firm McCourt Law Offices 30 years ago. Prior to that, McCourt worked in the Constitutional Law Section of the Alberta Attorney General's Department, so has more than a clue about how to consider the potential constitutional validity of existing and proposed laws.