03/27/2013 09:41 EDT | Updated 05/27/2013 05:12 EDT

Ontario Election Avoided? Liberals To Vote For NDP Motion To Cut Auto Insurance Premiums


TORONTO - Ontario's Liberal government agreed to support an NDP motion Wednesday calling for a 15 per cent cut in auto insurance premiums because rates are too high, Premier Kathleen Wynne said Wednesday.

However, the premier refused to commit to the NDP's demand that the government order the Financial Services Commission of Ontario, which regulates the insurance industry, to mandate the premium cut by the private companies.

"My support for this motion is an acknowledgment that this is an issue that needs to be addressed, it is something that we are working on in the lead up to the budget," Wynne told reporters.

"The specific mechanisms may not be exactly the ones that are in the NDP’s motion, but this is something of great concern to me, and we are working on it."

The New Democrats said they won't be celebrating with a victory lap until the 15 per cent premium cut is included in the provincial budget next month.

"We've said all along we want this done within a year, and we want it mandated through FSCO because we don’t want the Liberals to try to wiggle out of it," said NDP Leader Andrea Horwath.

"The people are clear that auto insurance rates are out of hand and they want to see some real action, so the proof will be in the pudding when we see the budget and we see whether or not the government’s really committed to this or they’re not."

The Progressive Conservatives agreed auto insurance rates are a problem, but said they could not support the NDP motion because there was no real plan behind it to lower premiums and no real basis for a 15 per cent rate cut.

"This is just bumper sticker politics," complained PC critic Jeff Yurek.

The Liberals agreed to vote for the NDP motion, which is not binding on the government, because car insurance rates are too high, especially in the Brampton and Mississauga areas, said Wynne.

"We’re supporting that motion because the underlying principle is we need lower rates for drivers in Ontario, and that’s what we’re working on," she said.

However, Wynne repeatedly refused to say if the Liberals would mandate the rate cut as the NDP are demanding, and said the government wanted to work with the industry on fraud.

"Implementing the recommendations of the anti-fraud task force is a very important aspect of how we’re going to get auto insurance rates down," she said.

"It’s something that we can work with the NDP on."

The NDP agreed there could be savings from implementing anti-fraud measures, but said the industry has realized huge savings in the past couple of years since the Liberals redrew coverage rules in 2010 that lowered benefits for most drivers.

Horwath cautioned the government against trying to back out of the commitment to lower premiums with a partial measure in the upcoming budget.

"Half-a-loaf isn’t good enough for the people of this province who have watched the insurance industry gain $2 billion in extra revenues in each of the last two years and seen nothing in terms of a little bit of a break for them," said Horwath.

"We know there’s already money owing, if you will, back to the good drivers, so we think the fraud will give us more opportunity, but let’s face it there’s already opportunity there in the industry."

The move by the Liberals to vote for the motion shows the minority government is willing to respond to New Democrat demands in exchange for getting NDP support for the upcoming budget, which would avoid triggering a provincial election.

The NDP voted to support the minority government on two confidence votes Wednesday, a routine supply bill and the throne speech bill, while the Tories voted against both measures.

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