Opinion: No-fault auto insurance could lead to UCP’s election downfall

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Earlier this month, Premier Danielle Smith easily survived a UCP leadership review at the party’s annual general meeting in Red Deer. Speaking to about 4,200 supporters (her party probably needs to increase that number by over 20,000 per cent to win the 2027 election), the premier promised, “Together we will vigorously protect the rights and freedoms of Albertans.”

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We will soon see if the premier keeps her promise. Unelected bureaucrats in Finance Minister Nate Horner’s department are eager to persuade UCP MLAs to adopt a no-fault auto insurance scheme administered by the multinational, multibillion-dollar insurance industry, extinguishing the rights of innocent Albertans to receive from reckless drivers’ insurers fair compensation for injuries and other damages. Justice Minister Mickey Amery surely knows this would be unjust, but what about his caucus colleagues?

Ronald Reagan famously said that “the nine most terrifying words in the English language are: I’m from the government, and I’m here to help.” Finance bureaucrats bent on forcing our province into a transformational cultural shift via massive marketplace meddling seem oblivious to the political reality that Albertans won’t take kindly to a lower price tag if the insurance product is gutted. A 10-per-cent off shoe sale is no bargain if the catch is that you only get one shoe. Thankfully, these bureaucrats have not been tasked with reducing the average price of vehicles in Alberta, as one wonders whether they might recommend banning the sale of F-150s and flooding the market with used Ladas.

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Half of Canada’s provinces (including Alberta) have tort law systems, under which at-fault motorists’ insurers must fully compensate blameworthy drivers’ injured victims. Three other provinces (Manitoba, Saskatchewan and B.C.) have no-fault auto insurance, administered by monopolistic non-profit government insurers. In addition to removing profit from the equation, no-fault provinces keep average premiums lower by slashing compensation for victims of negligent drivers, thereby allowing them to reduce rates payable by negligent drivers.

Alberta economists Dr. Jack Mintz and Dr. Christopher Bruce have repeatedly warned the government that replacing tort law with no-fault insurance reduces incentives for motorists to drive carefully, the tragic consequence being increased traffic accidents, injuries and fatalities. Of course, more road carnage inevitably causes a spike in auto insurance premiums.   

Polling shows that this no-fault concept is staggeringly unpopular with Albertans, who strongly believe in rights and responsibilities. Nuanced, conservative, “made-in-Alberta” solutions are readily available to reduce rates for good drivers within our existing tort law system by decreasing compulsory aspects of the standard auto policy and increasing the options. The UCP government is well-advised to put down the no-fault sledgehammer and pick up a scalpel.

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Twenty years ago, the Klein government was re-elected in Alberta (albeit with a reduced majority) a month after implementing a regulation reducing compensation for people with minor auto accident injuries (fast-healing sprains and strains). The Insurance Bureau of Canada notes that 80 per cent of injuries fall under this “minor” category.

A previous proposal to cap compensation for far more serious injuries was scrapped after Danielle Smith (then a Calgary Herald columnist) sharply criticized the proposal. Premier Smith undoubtedly is aware that since Ralph Klein’s victory in 2004, no subsequent Alberta Conservative leader has led their party into two consecutive provincial elections (not premiers Stelmach, Redford, Hancock, Prentice or Kenney).

A decade ago, when as leader of the opposition she crossed the floor of the legislature over to the ruling PC party just months before the general election, Smith was instrumental in helping the NDP become the Alberta government for the first time in that party’s history. If Premier Smith’s government decides to foist on Albertans a no-fault auto insurance regime administered by private, for-profit insurance companies, the UCP almost certainly will be giving the NDP a fighting chance to secure a second general election victory three years from now.

Mark McCourt is an automobile accident injury lawyer and principal counsel of the firm McCourt Law Offices in Edmonton.  

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