Last summer, a friend of mine got a $201 speeding ticket in Alberta. The ticket was then formally reissued on Alberta’s behalf, via mail, by publicly-owned Saskatchewan Government Insurance (SGI). My friend paid it.A couple of weeks later, another SGI ticket arrived — this time, for $650: an add-on punishment — or cash grab — for the Alberta ticket. And, according to SGI’s “standard calculation” formula, it didn’t just reduce my friend’s demerit points by one or two. It multiplied every one of them to date.Now, he'll apparently get back a measly, single demerit point only after a full 12 months of claims-free driving. And he'll achieve a completely clear, demerit-free record only if he makes no claim against SGI for 13 years.That’s not insurance. That’s a version of Victorian debtors’ prison. And this is a fellow whose only SGI claims have involved a couple of minor speeding tickets, a self-inflicted dent against a parking lot post, and misaligning his own tire on icy ruts. Hardly a grave danger to the public.If you want to get people talking in Saskatchewan, ask them about SGI. One acquaintance recently shared that her car was impounded before any driving offence on her part had been formally, legally established, and when it wasn’t, she had a devil of a time getting back the hefty impound fee. Losing her vehicle, meanwhile, had significantly impacted her small-business livelihood in the short term..Someone else recounted that after an unknown person backed into his car in a parking lot, he claimed the damages through SGI — then got demerit points and an add-on ticket. Talk about ‘no fault’! In another case, an acquaintance was hit by a driver who ran a red light. SGI determined 50/50 responsibility because both drivers had apparently been in the intersection. A dashcam video — offered by another driver, but initially discounted by SGI for “privacy reasons” — would prove otherwise. Even after watching the video, SGI wouldn’t change its mind, stating that the only way to challenge the decision would be to appeal to Small Claims Court.No wonder more and more Saskatchewan people say they’re paying for vehicle damage out-of-pocket, so as not to become entangled with SGI.At its root, car insurance is an affordability issue. As the Globe and Mail recently reported, “Canadians are hitting a breaking point when it comes to insuring their vehicles. Some are foregoing buying a second car, driving their cars longer, or choosing to drive less expensive ones. People can’t afford to own their own vehicles in this economy.”In 2022, SGI sent Saskatchewan drivers $100 rebate cheques through its “not-for-profit, self-sustaining” Auto Fund. Now, it’s proposing a 3.75% premium rate increase over the next two years to cover “inflation, advanced technology, and the growing cost of vehicle repairs.”Saskatchewan, like Manitoba and B.C., has no-fault, public insurance. When the system was introduced in 1995, it was primarily lawyers who raised a fuss. Suddenly, tort cases for “pain and suffering” were all-but wiped off their professional roster. This has largely been positive—and avoided drawn-out, costly, sometimes-mischievous litigation claims to establish “fault” before any benefits can be paid out.But that doesn’t mean reform isn’t needed. Or that government monopolies don’t tend to become bloated and inefficient. Cue Alberta’s recently announced auto insurance changes, which are designed to bring down car insurance premiums — among the highest in Canada — by also going no-fault.Sort of..Alberta is not adopting public no-fault. Parties can still keep their own private insurance company, which will cover vehicle damage and medical treatment — irrespective of who caused the collision — according to set compensation rates. In most cases, victims won’t be able to sue another party for injury unless the at-fault driver is convicted of a criminal offence such as impaired driving.The goal is to streamline claims and bring down primarily legal costs, which are up 19% since 2024. (Up to 800 legal jobs could be affected by the new changes, according to the Financial Post). But until the new model launches in 2027, insurers will be permitted to raise rates every year, including for good drivers, from a current 3.7% cap to a limit of 7.5%. After that, caps will be limited to 3.7% for good drivers, while bad drivers will continue to pay more in premiums.MEI’s long-held position is that rate caps lead to companies either removing services or pulling out of the market entirely, which has happened in Alberta. This reduces consumer choice and service quality. Prohibiting companies from adjusting premiums based on claim volumes and other costs leads them to be more selective about their client base and stricter about reimbursing claims.Insurance prices are linked to risk and should be set by the market rather than the government. Certainly, Alberta’s announcement is a good start. In Atlantic provinces, private no-fault systems have resulted in some of the lowest premiums in the country. But caps should be revisited.As for my friend with the Alberta speeding ticket, freed-up competition would have enabled him to choose an insurance company that, at the very least, doesn’t multiply accumulated penalties going back decades.Insurance consumers need less gouging and more general fairness.Bronwyn Eyre is a senior fellow at the MEI, a think tank with offices in Montreal, Ottawa, and Calgary.
