Ontario’s auditor general should investigate auto insurance rates after a new study found that Ontarians are being grossly over-charged.
A new study showing Ontarians were likely over-charged for auto insurance by $840 million, in one year alone, is sufficient cause for a fresh investigation by the province’s auditor general.
It’s no secret that Ontario residents are forced to pay a lot for auto insurance — we face rates that are 45 per cent higher than in Alberta, and about double what they are in the Maritimes. Hard-pressed consumers deserve more assurance that they aren’t being gouged.
Having the auditor general’s office dig into every aspect of this situation would either restore public confidence in the existing system or expose problems sorely in need of reform. The office did examine auto insurance regulatory oversight in 2011, but an updated and deeper probe is in order.
New concern over the fairness of the status quo was triggered last week by an analysis of the auto insurance industry done by two professors at York University’s Schulich School of Business, Fred Lazar and Eli Prisman.
They concluded that Ontario consumers may have overpaid for auto insurance by as much as $4 billion between 2001 and 2013, with excess fees amounting to $840 million in 2013 alone...More.
The Ontario Energy Board (OEB) reported their semi-annual bad news via the News Release that always contains depressing announcements about upcoming rate increases. Couched in words meant to assuage the reader, is this statement: “The price is increasing by approximately $4.42 per month on the ‘Electricity’ line, and about 3.4% on the total bill, for a household that consumes 800 kWh per month.”
The OEB doesn’t issue a press release when your local distribution company increases their rates, part of the “total bill,” so that reference is meaningless.
If you look at the actual price rise from November 1, 2014 to November 1, 2015 the increase is considerably more than 3.4%. In fact the increase on the charge for the “Electricity” line is 12.8% excluding the HST applied on that increase. The charge for electricity for the “household that consumes 800 kWh per month” increased by a total of $130.31, not the $53.04 that the OEB infers. Even using the “average” RPP (regulated price plan) posted on their site and comparing November 1, 2014 to November 1, 2015, you get an increase of 12.5%!
Costs from renewables are one-third of the increase
Looking further that what’s in the OEB News Release, we find that they attribute the increase as follows: “Increased costs from Ontario Power Generation’s (OPG) nuclear and hydro-electric power plants make up about 40% of this increase. Costs from renewable generation sources are another driver, representing about one-third of the increase.” I emphasized the last sentence as it doesn’t reflect certain facts about renewable generation (principally wind and solar), including the need to pay OPG for spilled (unused) hydro power, payments to gas plants to idle (ensuring power is available when the wind dies down or the clouds cover the skies), or directions to complete marginal generation (Mattagami’s project cost was $2.6 billion) which produces power when it’s not needed, in the Spring and Fall periods when Ontario’s demand is low.
Millions lost in one day
You need only look back to October 13, 2015, a windy day when the industrial wind turbines were cranking out unneeded power. The reported 3,450 MW of wind capacity was spitting out an average of 2,200 MW per hour, at a cost for the whole day of $6.5 million. Ontario was busy exporting 2,228 MW every hour that day, being paid 1.8 cents a kWh and at the same time, paying wind developers an average of 12.3 cents per kWh—we lost more than $5.5 million. That’s just one day!...More
Note: The Ontario Energy Board is a six-member regulatory body (four women and two men) headed by chairman Rosemarie T. Leclair. Although it is an arms-length organization, it almost invariably sides with government and/or energy suppliers. According to the 2013 Sunshine List, Leclair earns a $550,000 salary.
Nothing is certain but death and taxes, and it seems that Premier Kathleen Wynne is managing to make both worse for Ontarians.
On January 1, 2015, onerous new estate rules took effect in Ontario.
When a person dies, their assets are managed by an estate representative. In most cases, that person is the grieving spouse or children.
Ontario has the highest Estate Administration Tax (EAT) the country. The EAT was previously called a "probate fee," but in this rare instance of honesty the Ontario government has changed the name to reflect what it really is -- an estate tax.
The EAT rate is currently $5 per thousand for the first $50,000 of an estate, and $15 for each $1,000 after that. So an estate valued at $240,000 would pay a $3,100 in EAT. A $1 million estate would pay an EAT of $14,500. In other provinces, the rate is a flat set amount, or does not exceed $7 per $1,000 compared to Ontario's $15.
And of course, the EAT is paid on top of the taxes that Ontarians pay on the investments and assets they spend their whole lives working hard to acquire and leave to their children. Starting this past January, the rules around becoming an estate representative changed to create a great deal more work, and increased liability.
Under the old rules, staff at the local court would assess and collect the Estate Administration Tax based on a sworn statement listing the deceased's assets and their value. Under the new rules, the tax is not collected at the court. Now, the representative must apply for the Certificate of Appointment, and within 90 days, submit an "Estate information Return" to the Ministry of Finance. The Return must include a breakdown of the fair market value of each asset owned by the deceased on the date of death, and a detailed description of the assets. This requires onerous appraisals and valuations, and the detailed collection of information.
If the estate representation finds a mistake in the Return, a correction must be made within 30 days.
Failure to comply with these new burdensome rules can result in fines starting at$1,000, imprisonment for up to two years, or both...More
For the past five years the Ontario government has been taking steps to transfer money from victims of auto accidents to insurance companies.
We’ve seen drastic decreases in no-fault accident benefits.
To compound this, last month the Ontario government issued a regulation increasing deductibles that apply when people injured in auto accidents sue the person or persons who caused the accident.
This was done quietly, without any debate or meaningful notice.
These deductibles apply to accident victims who have suffered serious injuries and want to sue the at-fault driver or vehicle owner for negligence.
Only victims who can establish they have suffered a “permanent serious impairment of an important physical, mental or psychological function” are entitled to sue to recover damages not covered by no-fault accident benefits.
It isn’t easy to meet this threshold. Medical evidence must be provided.
So these victims haven’t suffered minor or nuisance sorts of injuries but serious ones.
Prior to the change in law last month, the Ontario government mandated that any pain and suffering damage award to an accident victim of $100,000 or less would be reduced by a deductible of $30,000.
That amount is an arbitrary, made-up number that takes money out of the pockets of accident victims.
For example, if a jury awards an accident victim $50,000 in damages, the judge will apply the deductible so that the insurance company only has to pay $20,000.
Of course, jurors aren’t told about the existence of the deductible for fear they might bump up their awards.
As of last month, the deductible has been increased to $36,540. So now the recipient of a $50,000 award will only receive $13,460.
The recipient of a $100,000 award will only receive $63,460.
There’s no other area of law where such a deductible applies. It only occurs in auto accident cases.
To make matters worse, the Ontario government has also decided to increase the $100,000 threshold for the application of the deductible.
TORONTO - There
are so many candidates, it’s hard to pinpoint exactly which boondoggle caused
us the most grief in our electricity bills.
Premier Bob Rae’s
NDP government used then-Ontario Hydro as a social program. His government
proposed fighting greenhouse gases by investing in a Costa Rican rainforest and
studying cow farts.
Then there was the
Homer Simpson moment, when it was revealed Ontario Hydro’s so-called dream team
of four American nuclear energy experts turned out to be more of a nightmare
for ratepayers. The Americans were paid close to $40 million for about four
years’ work at the Pickering nuclear plant around 1997.
Former PC premier
Mike Harris was going to open the market to competition in May 2002. That plan
ran into problems on several fronts: California was suffering from electricity
shortages due to market manipulation — the tip of the Enron scandal iceberg.
After the market opened, prices went from 4.3 cents a kilowatt hour to 8 cents.
The Tories took a hammering from critics and Harris’s successor, Ernie Eves,
backed away from the scheme. (Today’s price of electricity is 16.1 cents a
But the boondoggle
that really takes the cake is the mess created by former energy minister George
Smitherman with his Green Energy Act (GEA).
Back in March
2009, Smitherman wrote in this newspaper that the GEA “will shape not only the
way we do business in Ontario, but the way we think about energy and
He got that right.
The cost of electricity has soared. And we don’t do much business anymore
because companies moved south to the U.S. and Mexico.
He claimed the GEA
would create 50,000 jobs — a claim later refuted in a scathing report by
then-provincial auditor general Jim McCarter.
In 2011, McCarter
said the GEA was not just hiking the price of electricity, it was actually
forcing us to generate more nuclear and gas-fired electricity — to back up
unreliable renewables. And it didn’t produce jobs — it killed them.
energy is very expensive, the impact of higher electricity prices on the other
job sectors actually has resulted in a net loss of jobs,” McCarter said at that
time. And he’s been proven absolutely correct.
In her most recent
report, auditor general Bonnie Lysyk painted a gloomy picture of how this
government’s mismanagement of the energy sector has added billions to our
the so-called Global Adjustment (GA) — that’s 70% of your bill — cost us $654
million in 2006. In 2013, it gouged $7.7 billion from us.
What did we get
We must be
bursting with clean, green energy, right?
According to the
Independent Electricity System Operator (IESO) website, on Tuesday at 2 p.m.
exactly 0.2% — (or 43 megawatts) of our electricity came from solar. A piddly
1.6% (326 MW) was from wind. The lion’s share of our generation — 55.6% — came
from green, reliable nuclear energy.
hydroelectric power — the only truly cheap green electricity — came in at 23.7%
and gas-powered plants were at 18.5%.
The hourly price
of electricity was just 3.02 cents a kilowatt hour. And the GA? A whopping 9.67
cents a kWh — three times the cost of the hydro.
So for all the
billions of your tax money that were flushed down the drain on so-called green
energy, solar and wind made up less than 2% of our power...More
Ontario’s car insurance
system seems to work well except for consumers who need it and accident victims
who make legitimate claims under it.
After all, the insurance
industry is making good money.
Lawyers are amply rewarded
acting for plaintiffs and insurance firms.
Doctors earn significant
sums preparing insurer-requested medical reports.
Treatment providers receive
good compensation for treating the injured.
Premier Kathleen Wynne
received generous financial support from the car insurance industry when she
ran for the Liberal leadership.
The Liberal party receives
significant campaign donations from it.
But here’s the problem. Two
The first is fraud by people
trying to rip off insurance companies with phony claims. We agree it happens
and it’s a serious problem.
But what we don’t understand
is why the amount of fraud -- to hear it from the insurance companies -- never,
ever, seems to decrease.
Fraud, we’re told, is the
main reason auto insurance premiums in Ontario remain stubbornly high, no
matter how many times the government cuts back benefits to all accident victims
at the behest of the insurance industry, as it did again in its latest budget
passed last week.
We also think there’s
another kind of fraud in the insurance industry that needs to be addressed by
That fraud happens when
people who have faithfully paid their auto insurance premiums year after year
are hurt in serious accidents and, when they make legitimate claims for the
benefits promised in their policies, are denied them...More
convicted white-collar criminal, Queen’s Park proposed
sale of a majority stake in Hydro One has sparked my interest. The proposal
on the table is a con job of astronomical magnitude.
is this a bad deal?
it is a bad price.
people — like the people who have agreed to help Queen’s Park unload its
majority stake in Hydro One — value companies based upon a couple of different
factors. Sometimes the value of a company is based on the value of its assets:
land, factories, intellectual property, and brand name recognition. The
thinking being that better management of those assets might generate higher
profits. Sometimes the value of a company is based on its profitability. A
stable stream of income is worth paying good money for. Some companies are
valued on their assets, others are valued on their earnings; sometimes it’s a
little of both.
One is a stable generator of profits. It has been profitable since it was
created out of the breakup of Ontario Hydro. Its profits have grown 6.3 per
cent per year for the last 14 years. It reported earnings of $749 million for
2014 — all of which belong to the people of Ontario. You and me.
we all know that the province is in debt. $284 billion. That’s the bad news.
The good news is that investors love to buy government bonds. Investors are so
eager to buy Ontario bonds that they compete as to who will accept the lowest
interest rate. In March, bond investors lent Ontario money for 10 years at a
rate of 2.1 per cent. Our average interest rate on all our existing debt is
only 3.8 per cent (and falling).
we have some numbers to work with: 1) Hydro One earns $749 million. 2) The
province pays, on average, a 3.8-per-cent interest rate on its outstanding debt
and 3) the province can borrow new money at rates as low as 2.1 per cent for 10
years. So here’s the question: how much should we, as Ontarians, receive for
selling this $749-million income stream?
way to calculate it is to say that $749 million pays all of the interest on $20
billion in existing government debt at a rate of 3.8 per cent. So, to accept
anything less than $20 billion in cash is a bad deal.
way is to say that $749 million will pay all of the interest on $36 billion of
new government debt at a rate of 2.1 per cent. So, to accept anything less than
$36 billion in cash is a bad deal.
number that doesn’t make sense is $15 billion. That’s the value that the
premier has put on Hydro One. (If 60 per cent is worth $9 billion then 100 per
cent is worth $15 billion). That is the number that Bay Street has convinced
the Premier to accept for selling a profitable and growing business that earns
$749 million with an earnings growth rate in excess of 6 per cent.
is she doing this?
don’t know. But I can tell you why Bay Street is pushing this deal.
In addition to buying a blue-chip electricity monopoly at a rock-bottom price
they hope to make money by “underwriting” the deal. They intend to charge us a
fee for selling our Hydro One to themselves at a terrible price. And a deal of
this size could be worth hundreds of millions of dollars in fees.
have a lot of respect for investment bankers. They are the guys (mostly guys,
anyway) who help companies “go public” by convincing ordinary Main Street
investors to buy shares in newly public companies. That takes a lot of work and
is not without some risk.
will not take a lot of work for them and involves no risk is selling Hydro One
at a ridiculous, giveaway price.
not an expert on whether or not Hydro One needs new management or if we would
all be better served if Hydro One were not 100 per cent owned by the people of
Ontario. But I do know that for $9 billion, the new shareholders should get
somewhere around 30 per cent of the company, not 60 per cent.
deal is the biggest con I’ve ever seen.
M. Summers is a former hedge fund manager and was
convicted of fraud in 2014. He is currently serving a three-year sentence. His
book, Conned: How Wall Street Rips You Off and How to Fight Back will
be published this fall.
Rn a political campaign without ever leaving the hose.
My congratulations to
Prime Minister Stephen Harper and the Conservative party; they’ve found an even
better form of voter suppression than robocalls. They have refused to
participate in the TV debates put on for every general election by Canada’s
network television consortium since 1968 — back when voter turnout was north of
75 per cent.
For the life of me, I
don’t know why the PM blessed Maclean’s with the task of conducting the debate,
when party spokesperson Kory Teneycke and the elite journalists of 24/7 were
standing at the ready, fully funded by the taxpayers, to get the job done.
I guess Steve didn’t want the
10 million viewers that CTV, Global and the CBC have to offer. After all, a
mass audience would only give his opponents a bigger opening to
track for the entire nation the death spiral of democracy and the
rule of law in Canada — to say nothing of the parody of Conservative ethical
values the Harper regime now represents.
Maybe that’s why Harper
wanted a change of moderators. Steve Paikin earned a reputation as a fair and
impartial moderator in the 2008 and 2011 debates. Maybe that was
a problem. Or maybe it was the fact that his son, Zach, tried to run for
The real reason for
Harper’s sudden attack of cold feet is probably the Alberta election — which
offered an object lesson in how a strong debate performance can change
everything. Jim Prentice didn’t have enough spinners and fear-merchants to
scupper the radiant sincerity of Rachel Notley.
There are a lot of
things Steve might not want to be confronted with in a well-watched,
well-researched television debate. Despite balanced budgets, low unemployment
and a booming commodity export market under the Liberals, corruption and
accountability dominated the 2006 election. The defining moment of the 2006
debate came when Stephen Harper said: “Will you tell us Mr. Martin, how many
criminal investigations are going on in your government?”
Martin was defeated by
the Ad Sponsorship scandal, an elaborate kickback scheme that saw public money
directed back to the Liberal party. Martin wore it even though he wasn’t
involved. To his credit, and for all the right reasons, he assembled his own
firing squad in the form of the Gomery Commission.
For all the wrong
reasons, Steve never called an inquiry into the robocalls scandal. Trust me —
you will never see a boomerang leave Steve’s hands if he can help it.
At the time Steve
asked Martin that question about criminal investigations in 2006, the correct
answer would have been “two”. If someone were to ask Steve the same question
during the 2015 debate, he wouldn’t have enough fingers on both hands to
compute the response. By my count, the Harper team has been the subject of at
least 15 investigations. The stable which he was supposed to muck out has
become a pigsty on his watch.
cheated in the 2006 election. Criminal charges of improper election spending
were dropped in March 2012 as part of a plea deal. The CPC pleaded guilty to
exceeding election spending limits and submitting fraudulent election records.
They chequebooked their way out of the slime — paying a $52,000 fine and then
repaying a further $230,198.
The PM’s former
parliamentary secretary, Dean Del Mastro, has been convicted on three counts of
election fraud arising out of the 2008 election. He is now facing the possibility of jail time. His
cousin, David Del Mastro, is also facing charges related to the 2008 election.
Does Premier Kathleen Wynne even
believe the things she says? Do you?
Perhaps she does, since she leads a
province with a multiparty system that allows her to win a majority government
with less than 40% of the vote.
A province where she is the leader
favoured by the bloated public sector unions, not to mention facing a weak
And so, like the leader of some
tin-pot dictatorship, perhaps Wynne hears nothing but the sound of her own
voice and has come to believe it.
On budget day last week, Wynne spoke
with Ryan Doyle on Newstalk1010, were I work.
She touted her, “sound fiscal
management.” Beg pardon?
Ontario’s debt is more than twice
that of the state of California. But, of course, California has a larger
economy than Ontario.
In 2014 the Fraser Institute
reported, “The gross debt in the form of bonds is 7.6% of California’s economy,
while it is a whopping 40.9% of Ontario’s economy. Put differently, as a share
of the economy, Ontario’s debt is more than five times larger than
The Fraser Institute reported,
“Ontarians currently owe CA$20,166 per person compared to US$3,844 for
Californians, which is more than five times the per-person level of debt.”
When the Liberals took power in 2003,
Ontario’s public debt was $138.8 billion.
Now it’s $298.9 billion, a 115%
Wynne’s new budget is long on
infrastructure spending, which is sorely needed, but short on details on where
that money will come from.
Unable to balance the budget, the
Liberals have no money for debt retirement.
The day after the budget, Moody’s
Investors Service issued a report titled, “Moody’s Continues to See Risks in
“We remain attentive to the fact
deficits have shown little progress in the past few years, and in fact have
increased from 8.1% of revenues in 2012/13 to 9.2% in 2014/15”, noted Michael
Yake, a Moody’s VP and lead analyst for the province of Ontario.
He continued: “Achieving the budget’s
goal of reducing the deficit to CA$8.5 billion (6.8% of revenue) in 2015/16
would represent a positive step, but the return to balanced budgets by 2017/18
still faces considerable risks in our view.”
That’s not as sunny an outlook as the
one projected by the Wynne government.
A casual dismissal of the private
sector by Ontario’s premier is illustrative of her beliefs regarding business
When Doyle asked about the new
Ontario beer tax she’s imposing ($100 million annually) Wynne said we know from
research if alcohol sales are privatized, prices goes up. The example most
often used is Alberta.
Except studies by the Fraser
Institute disagree, which also show the number of outlets, varieties of beer
available and employment increased.
Indeed, looking to our southern
neighbours, who are within easy driving distance of Queen’s Park, the cost of
30 cans of Labatt beer on special at Consumer’s Beverages in Buffalo, N.Y. is
$19.99 this week.
At The Beer Store in Ontario, 24 cans
cost $46.50. Road trip, anyone?
It isn’t the private sector that has
driven the cost of alcohol through the proverbial roof, the government has.
Basically, Wynne gives us bad fiscal
management and a delusional view of how the private market works.