Tuesday 9 February 1993

Insurance Statute Law Amendment Act, 1993, Bill 164

Mel Basbaum; Patti Leonard; M. Alan J. Finlayson

Ontario Head Injury Association

Raymond Rempel, executive director

Ontario Risk and Insurance Management Society

Susan Meltzer, member

Allstate Insurance Co of Canada

Terry Kelaher, president

James K. Bowles, corporate claim development manager

François Boulanger, assistant vice-president, actuarial and management information

David Corey

Canadian Bar Association--Ontario

Erica James, president

Tim Bates, member, executive committee

Ian Kirby, chair, auto insurance committee

Michael Trebilcock

Association of Canadian Insurers

John Lewington, director

R. Lewis Dunn, director

Canadian Mental Health Association, Ontario Division

Oscar Johvicas, director of organizational development

Canadian Association of Rehabilitation Centres

Allan T. Walton, president

Ontario Psychological Association

Dr Ronald Kaplan, co-chair, task force on automobile insurance

Dr Gary Snow, co-chair, task force on automobile insurance


*Chair / Président: Hansen, Ron (Lincoln ND)

*Acting Chairs / Présidents suppléants: Huget, Bob (Sarnia ND); Winninger, David (London South/-Sud ND)

Vice-Chair / Vice-Président: Sutherland, Kimble (Oxford ND)

*Caplan, Elinor (Oriole L)

Carr, Gary (Oakville South/-Sud PC)

Christopherson, David (Hamilton Centre ND)

Jamison, Norm (Norfolk ND)

Kwinter, Monte (Wilson Heights L)

*Phillips, Gerry (Scarborough-Agincourt L)

Sterling, Norman W. (Carleton PC)

Ward, Brad (Brantford ND)

Wiseman, Jim (Durham West/-Ouest ND)

*In attendance / présents

Substitutions present / Membres remplaçants présents:

Cooper, Mike (Kitchener-Wilmot ND) for Ms Ward

Frankford, Robert (Scarborough East/-Est ND) for Mr Christopherson

Harnick, Charles (Willowdale PC) for Mr Sterling

Huget, Bob (Sarnia ND) for Mr Ward

Johnson, Paul R. (Prince Edward-Lennox-South Hastings/Prince Edward-Lennox-Hastings-Sud ND) for Mr Christopherson

Klopp, Paul (Huron ND) for Mr Jamison

Mancini, Remo (Essex South/-Sud L) for Mr Kwinter

Owens, Stephen (Scarborough Centre ND) for Mr Sutherland

Tilson, David (Dufferin-Peel PC) for Mr Carr

Winninger, David (London South/-Sud ND) for Mr Wiseman

Also taking part / Autres participants et participantes: Owens, Stephen, parliamentary assistant to the minister responsible for automobile insurance review

Clerk pro tem / Greffier par intérim: Carrozza, Franco

Staff / Personnel:

Chan, Rebecca, assistant to the clerk

McNaught, Andrew, research officer, Legislative Research Service

The committee met at 1005 in committee room 1.


Consideration of Bill 164, An Act to amend the Insurance Act and certain other Acts in respect of Automobile Insurance and other Insurance Matters / Loi modifiant la Loi sur les assurances et certaines autres lois en ce qui concerne l'assurance-automobile et d'autres questions d'assurance.

The Acting Chair (Mr Bob Huget): It's shortly after 10 am. I apologize for the delay.


The Acting Chair: The first group to present this morning is the Chedoke-McMaster Hospital. Could you come forward please, take a chair behind the microphones and identify yourselves for the purposes of Hansard, and we'll be under way.

Mr Mel Basbaum: My name's Mel Basbaum.

Ms Patti Leonard: I'm Patti Leonard.

Dr M. Alan J. Finlayson: Alan Finlayson.

Mr Basbaum: Perhaps we should clarify that while we are all employees of Chedoke-McMaster Hospital, we're not officially representing the hospital in this capacity.

Mr Remo Mancini (Essex South): That's why we put you on the list.

Mr Basbaum: Okay. Well, Hansard now has that right.

The Acting Chair: It doesn't matter. It's there for all time, sir.

Mr Basbaum: Our formal presentation will be brief and then hopefully we can spend a fair bit of time in responding to your questions and issues.

We'd like to compliment the government on its proposed revisions to the Ontario motorist protection plan. We spoke at the previous hearings and had a number of concerns which we're pleased have been addressed in this most recent draft. These include elimination of the threshold, elimination of lifetime limits on rehabilitation and long-term care benefits, increasing the weekly indemnity to cover 90% of all wage earners, and finally, indexing of all benefits.

Some concerns still remain with the proposed amendments:

(1) Care giver benefits: The maximum benefits to care givers have limits which our experience suggests do not reflect the actual costs that may be incurred.

(2) Education disability benefits: The legislation provides compensation based on a percentage of the average weekly earnings, AWE, in Ontario. The legislation is condemning those with the most catastrophic disabilities to a standard of living which is not only below the AWE but does not recognize their true earning potential. Though we recognize the difficulty in defining potential earnings, there is the need to re-examine the legislation in an effort to develop the fairest mode of compensation.

(3) Other disability benefits: Those individuals who do not qualify under IRB, education or care giver benefits will receive a non-indexed benefit of $185 per week if over the age of 16. We do not understand the rationale for singling this group out for a non-indexed pension.

(4) Attendant care benefits: While the elimination of the lifetime maximum on attendant care benefits is a positive move, maintaining a limit of $3,000 per month, approximately $100 per day, would restrict those individuals who require 24-hour attendant care. The reality is that these individuals comprise a small percentage of injured persons; however, the $3,000 per month maximum could severely limit their quality of life and community living options. The cost of lifelong living options could be up to three times that amount.

(5) Exclusions: The proposed plan continues to exclude those convicted of drinking and driving or convicted of an indictable offence in the operation of an automobile. These individuals should be subject to the full measure of the law as it would be applied to any individual. On the other hand, refusing benefits not only denies the basic tenet of no-fault insurance but it also transfers the responsibility for services to the province by virtue of the need to access social assistance, vocational rehabilitation services and, if necessary, long-term care facilities. There is also an element of punishing the care giver, ie, the family, for the action of the claimant, as well as denying the claimant reasonable access to benefits and rehabilitation.

(6) Finally, subrogation: The OMPP transferred the costs of hospitalization and medical treatment to an already overburdened health care system. Rather than continue to encumber impoverished institutions, we recommend that health care costs be reimbursed to OHIP.

The current proposals also have some potential problems. The issue remains that standards do not exist which facilitate access to appropriate rehabilitation services or ensure timely arbitration when there is a dispute.

(1) In the resolution of disputes between the insurer and the insured person, the same guidelines which exist for other disciplines should exist for the physician. In other words, the physician should be qualified to assess and/or treat the insured individual's disability. For example, a gynaecologist would not be suitable to offer an opinion on someone suffering from a head injury, but would be suitable for someone complaining of severe, chronic pelvic pain.

(2) Disputes should be handled in a timely manner. This would help to prevent the development of psychological distress, increased disability and increased burden on the health care facility, problems which develop as a result of continued delays.

(3) Potential conflict of interest may arise in the provision of rehabilitation service if there is no distance between the insurer and the service provider. The certification of the insured person should be conducted by a disinterested third party who would not benefit from the provision of rehabilitation services. Anyone who is providing health, legal or insurance services should not benefit financially from rehabilitation services rendered.

(4) Standards: It's important to ensure that people have access to assessment and treatment options provided by individuals who are competent and qualified to provide service and are at arm's length from the referral source. The need exists for the development of standards for rehabilitation specialists and case managers. In the past several years, a large industry has developed in the absence of standards or regulations. The government of Ontario must provide leadership in the development of standards and qualifications regulating this industry.

(5) Finally, another potential abuse is the trend to increasing involvement by US health care services. At present, we are aware of marketing efforts towards Ontario clients who now appear to have unlimited access to motor vehicle insurance dollars. This could lead to inappropriate or unnecessary expenditures which could be directed to more appropriate and less costly service options in Ontario. This could be prevented if US access is allowed for rehabilitation only in situations where appropriate provincial resources cannot be provided in a reasonable period of time. OHIP has recently reviewed and delineated new policies for out-of-country access which may be helpful for this committee to review.

We thank the committee for this opportunity to present our concerns. We trust that our collective clinical experience will assist in your deliberations, and we'd be pleased to respond to any issues you might have.

The Acting Chair: Thank you very much.

Mr Mancini: How much time do we have, Mr Chairman?

The Acting Chair: We've got approximately six minutes per caucus.

Mr Mancini: I want to thank the presenters for their brief. Actually, it's quite good and right to the point. It cut through a lot of the unnecessary rhetoric and got right to the issues, which are important to people who would ultimately have to use the services of health professionals and the services of the insurance industry when and if they needed it.

I don't disagree with many of the things you've said. All of the things that you favour are in fact benefits. All of the suggestions that you've made in regard to the delivery of health care services make good common sense. I won't dispute any of the suggestions you've made.

The only area I take somewhat of a different view on is whether or not all of the so-called benefits and changes in Bill 164 are in fact benefits and changes. When we look at the fact that the right to sue for economic loss has been exchanged for the right to sue for non-economic loss and on top of that there's a $15,000 deductible, don't you agree with me that this is not really a good tradeoff for the consumer, ie, the injured victim?

Mr Basbaum: I guess I look at it from the perspective of a service delivery professional. Having worked, in my case, in the area of spinal cord injury rehab for 20 years, the major difference since the previous introduction of increased no-fault benefits has been the ability to deal with the rehabilitation needs and the reintegration of individuals into the community in a much quicker and more efficient way that is much more helpful to the individual in terms of his own quality of life and also less costly to the health care system with extended delays in terms of discharges from hospital.

Mr Mancini: I accept all of that. I accept everything you've told us in that regard. But I'm concerned about what happens to people's families in the case of a fatality. These are the briefs we've received over the last couple of weeks. We've had numerous litigation lawyers before us, numerous other experts before us, and they have given us case scenarios which indicate without a shadow of a doubt that in the case of a fatality, a young working-class person's family would be reduced to living below the poverty line because they could not sue for economic loss.

I'm sitting here and I'm saying I appreciate that the government wants to increase benefits. I appreciate the fact that we need indexation. I appreciate the fact that they want to remove caps. I appreciate all of that.

Now we move over to the next issue of concern -- and don't forget there's going to be a cost for that. There's going to be a premium increase, and there have been numerous witnesses, from the senior citizens, every group imaginable, who've told us that the $200-per-year policy increase is not worth the benefits. We can talk about that in a moment.

I accept everything you've told me on the delivery of the health care. I'm not here to dispute that with you. I'm here to talk about the other parts of the bill, because we have to look at Bill 164 in its entirety. It's got to be an entire package, it's got to be fair, it's got to be balanced, and it has to be a special commodity that people can afford and pay for.

Do you not agree with me that, removing the right to sue for economic loss, specifically in cases of fatalities, specifically in cases where people are rendered quad, they in fact will receive less under Bill 164 and their family's need is greater?

Have you seen the presentations we've looked at?

Mr Basbaum: Not all of them, no, not entirely.

Mr Mancini: Then maybe you're at a slight disadvantage, but the record will show that wherever we've travelled and whomever we've heard from during the course of a day, we've had unrefuted evidence, documentation, that shows that the right to sue for economic loss should not be taken away and exchanged for the right to sue for pain and suffering with a $15,000 deductible.

The other concern I have is on the whole issue of the increased weekly benefits. Are you aware that the way the regime is set up now, people earning under $40,000 will actually be subsidizing people earning up to $80,000 and $90,000, because in order to get the $1,000 a week, you have to earn about $1,700 or $1,800 a week? Are you aware of that? Are you aware of how that regime is working?

Mr Basbaum: I thought it was based on 90%.

Mr Mancini: That's right, and there's nothing in the policies that says, "You're earning $40,000 a year and therefore you'll be discounted $63 and you're earning $85,000 a year so you'll be incrementally increased $85 so that the person earning $40,000 a year is not subsidizing the person earning $90,000 a year through his premiums." Are you aware of the information we've received in that regard?

Mr Basbaum: I'm not sure I understood the -- no, obviously not. Do you understand that, Alan?

Mr Mancini: I have no further questions, Mr Chairman. Maybe Mr Phillips has.


The Acting Chair: Thank you, Mr Mancini. Mr Tilson.

Mr Gerry Phillips (Scarborough-Agincourt): Are we out of time?

The Acting Chair: Yes.

Mr David Tilson (Dufferin-Peel): Are you familiar with the current system, what is known as the OMPP?

Mr Basbaum: Yes.

Mr Tilson: Is it working?

Mr Basbaum: I'll let my colleagues respond as well, but from the point of view of someone in the service delivery aspect, yes, it is. It's working a lot better than the system we had before, which involved tort, in which we saw a great many people lingering in hospital beds while waiting for something to occur through the court system.

Mr Tilson: It may well be that I don't understand what your position is. You seem to be supporting this legislation. The type of people you are going to be assisting are the serious types of injuries.

Mr Basbaum: That's right.

Mr Tilson: Those people are going to be sitting under tort under this legislation, if it's serious.

Mr Basbaum: They are, did you say?

Mr Tilson: They will be.

Mr Basbaum: Only for pain and suffering.

Mr Tilson: They don't have anything else. They've taken everything else away. Everything else is gone. There is no economic loss. That's what Mr Mancini is trying to raise. That's the very point. That's why I guess I don't understand your position. It's as if you're thinking that tort is evil, and it may be in certain cases and not in others, but I guess the type of people you will be assisting will be those who have sustained, to use your words, pain and suffering over $15,000. You're going to be seeing the same people anyway.

Dr Finlayson: If I may comment, I work in the head injury field, and we do see people currently who do not qualify for the current threshold. The difficulty we have with parts of your questions, Mr Tilson and Mr Mancini, is that we are neither accountants nor lawyers. We have tried to address ourselves to our area of expertise, which is rehabilitation. From our perspective -- and that may be a limited perspective in terms of this current bill -- we feel that a number of the changes have been very positive and have facilitated the kind of work in which we are engaged and about which we can speak.

Mr Tilson: I guess the difficulty we have is, there have been very few people. There's been a number of people who have been injured who've come and said they didn't like the OMPP because they didn't qualify for it. The threshold test was too high. That's been a criticism. We've had individuals come to the committee who have said that.

But I guess other than that, the question is, is it working? If the test can be modified, through either the courts or an amendment to the test -- and from your perspective you don't care about that. Your concern is whether these people are going to be helped, which gets to my real question, and that is, we're all very worried about where the health system in Ontario is going. Is there going to be enough money to fund hospitals to care for people?

Dr Finlayson: Actually, what has happened with the current legislation is that it has improved rehabilitation services for a number of people; for example, people with minor head injuries who often wouldn't come to the attention of the hospitals are now able to be serviced quickly without waiting for tort action.

Mr Tilson: That's assuming the system's going to work, because the insurance industry has come to us, whether it's a broker, whether it's a claims examiner, whether it's a company, and they're saying rates are going to go up, notwithstanding the fact that the ministry is saying the rates aren't going to go up.

I guess the fear is that by creating this new system from a system that was already working, generally speaking, with the exception of the problems with the threshold, and more and more people are saying, "Maybe we can fix up the threshold," the general system is quite a drastic change.

The question is, can it be paid for? It gets back to that question of cost. I guess that's the fear: the uncertainty that the insurance industry is saying, "We don't even know what this is going to cost, we don't even understand all these benefits." Nobody understands them. I'll bet you don't understand them.

Mr Basbaum: The other thing is that the insurance company was also the one, if you recall, who said that rates would continue to increase if we maintain tort, and that was one of the reasons it was basically eliminated, except in threshold cases, in the last legislation. It's a no-win situation. If we provide full rehabilitation services without tort or without tort for other than pain and suffering, it's going to cost too much, but if we provide tort, they're going to say the same thing, I would suspect.

Mr Tilson: I guess we have a system that started with the OMPP and, yes, the members of the Progressive Conservative Party and the members of the NDP fought tooth and nail against that legislation, but it's there. There are suggestions that it's not working, or maybe there should be more time allowed to let the system work.

In other words, the question that remains is why we are changing it. Why are we changing the system if you've got a system that generally speaking -- because I don't imagine any system is perfect. But why are we not providing more time? Why are we not providing more time to answer the question you've raised, that the threshold test may be too high and maybe it should be modified? The courts are in the process of changing that now. Is this legislation premature?

Dr Finlayson: That's, I think, a political question. From our point of view --

Mr Tilson: I'm sorry. It's a what question, sir?

Dr Finlayson: A political question, I think.

Mr Tilson: I'll say.

Dr Finlayson: Again, just let me narrow our perspective to that of people working in the rehabilitation field. We did feel some changes were necessary and those changes we are supporting are those that remove the limits on long-term care support, and in fact we're asking that those be increased. Secondly, we did not feel the benefits for rehabilitation were adequate and we wish to support motions to improve those.

Mr Stephen Owens (Scarborough Centre): Surprisingly I, unlike my colleagues, will deal with the issue you actually came here to talk about today, and that is rehabilitation.

In terms of the issues you've addressed here this morning, they form part of the regulation and, as you know, the draft regulation is still that, a draft. We certainly appreciate your suggestions with respect to issues around the care giver benefits, education, disability benefits and other disability benefits and attendant care.

In terms of the attendant care benefits, you're aware that a task force has been set up to look at the $3,000-a-month cap and, I think just as importantly and perhaps even more importantly, to set up standards of rehabilitation which you addressed on the next page of your brief.

Currently, how do you view the standards that exist for the treatment of those who are most catastrophically injured? Are they in fact effective for all persons? Is there a way we can look at tightening up the kinds of standards with a view to providing the highest level of efficacy to the most catastrophically injured accident victim?

Dr Finlayson: I think, Mr Owens, the issue is not tightening up the standards; I think the issue is developing them. There are no standards for care. Those standards that do exist exist within the ethics and professional guidelines of individual disciplines. There are no standards that we are aware of for rehabilitation services.

Mr Owens: While Mr Mancini is sitting here agreeing his government did nothing around this issue with respect to their passage of OMPP.

Mr Mancini: That's why the bill had to be reviewed in two years. It's right in the legislation.

Dr Finlayson: We have been talking with several governments, in fact all three of the represented parties, with developing standards over the last 15 or 20 years, so it's an issue I think everybody can share some guilt for.

Mr Owens: We are, in my view, the first who will actually sit down and will have set up the task force with respect to setting those standards. As a person who is involved in the Regulated Health Professionals Act, again a bill that has transcended three different governments, it's my view again that we need to be providing the kind of rehabilitation with a standard of practice that ensures the protection of the patient or the victim and gets that individual back into the workplace and contributing as a member of society.

Are you going to be involved in that task force in terms of submitting information, suggestions for standards of care?


Dr Finlayson: We would be if we knew how to address it.

Mr Owens: Okay. We have some ministry staff here and we will be pleased to chat with you afterwards.

In terms of some of your points with respect to the proliferation of rehab centres, especially, I believe, private sector rehabilitation, the US health care services that you've identified, our government shares the concern of your group and many others that a person on day one is an auto mechanic and by day three he or she is a rehab specialist. What is your experience in terms of dealing with these kinds of agencies, and in fact have you had to deal with the sequelae of a person who has been through a service like that?

Dr Finlayson: Our experience is mixed. We are able to work quite successfully, hand in glove, with some private rehabilitation firms, and there are those with which we have had a great deal of difficulty. One of our biggest concerns is the beginning of a trend: For example, a young man who had been working out of his own home, his insurance company approached the family about sending him to the States for rehabilitation treatment at the expense of the charges to the no-fault insurance at a cost much, much higher than for the service that we were providing, which is, I think, an adequate and excellent service.

Mr Owens: Just one last question, sir. In terms of the government's commitment to long-term care reform, do you see this as playing a role in rehabilitation? It's our view that long-term care should be a continuum, that people have the opportunity to opt in as required, and ultimately to try and give people the best quality of life in the non-institutional setting. Do you have a view on how the long-term care process that we're undergoing can dovetail with your concerns and our concerns with respect to rehabilitation?

Mr Basbaum: Certainly they can dovetail and many of the recommendations within the long-term care reform would be consistent with it.

To digress just a little bit, since you've raised that, one of the concerns I have is that we treat the disabled in terms of categories in many cases, whether they have had an employment injury, a motor vehicle injury or they slipped on the ice and injured themselves. I think part of the problem is that, depending on how you were injured, the kinds of rehabilitation you're entitled to, financially anyhow, become very different.

In terms of the long-term care reform, I think what needs to be done in that respect is that we need a more uniform approach where people who require services are eligible for those services, and it has nothing to do with whether they happen to walk out in the middle of Yonge Street or happen to fall off their balcony. I think that's part of the problem.

Mr Owens: Absolutely.

The Acting Chair: Thank you very much. On behalf of the entire committee, we'd like to thank each of you for coming forward this morning and presenting your views, and I would encourage you to stay in touch with the committee as this legislation proceeds through the process, either through the clerk or through individual members of the committee. Once again, thank you very much for coming forward this morning; we appreciate your time.

Mr Owens: We will certainly follow up in terms of your concerns with respect to the task force and input as well. Thank you.


The Acting Chair: The next group is the Ontario Head Injury Association and I assume you're taking your place now.

Mr Raymond Rempel: Yes, sir. I'll grab a coffee.

The Acting Chair: Right on. That's what it's there for.

Good morning, sir, and welcome. Perhaps you could identify yourself and proceed with your presentation at your leisure. Please try and leave some time for questions and answers and dialogue among the committee members.

Mr Rempel: My name is Raymond Rempel and I'm a co-founder and the executive director of the Ontario Head Injury Association. I'm a member of the provincial brain injury advisory committee to the Minister of Health and a member of the provincial rehabilitation advisory committee as well, to give you a bit of background on our interest in rehabilitation.

I want to just scan my report for you and take you through it very quickly. We have 10 suggested changes to Bill 164, and I want to hit on five points on the way to those 10.

If you go down to the second paragraph of the introduction, just to help you understand, first of all, I understand that probably 80% of the cases that become problems for insurance companies really are the result of a blow to the head, traumatic brain injury, so you need to understand that damage to the brain need not be severe or dramatic to be life-changing.

Trauma to the brain causing cognitive and behavioural deficits occurs even when there is no direct blow to the head. According to the Center for Cognitive Rehabilitation, just outside of Seattle, Washington, permanent brain injury can result from a person being thrust forward and backward in an automobile without actually striking the windshield. Professionals refer to this as minor head injury. We refer to is as frequently life-altering minor head injury.

If you turn the page to page 2, the first of the concerns we'd like to address is attendant care benefits, the ongoing care provided to the individual. Suffice it to say that in his recent press release regarding the rehabilitation standards committee Mr Charlton has set up, he indicates that this legislation removes the caps. But for a person who is significantly impaired, especially cognitively, $3,000 a month is a heinous cap. I'm aware of costs for long-term care and for attendant care, and I can assure you that anything approaching efficacious care for a person who requires ongoing support is not going to be handled at $3,000 a month. We're looking at $200 to $600 a day. So that's one item that needs to be addressed.

Secondly, "Loss of Opportunity," at the bottom of page 2: This is an interesting scenario, if you'll just follow through with me. We recently polled recent university graduates to find out how many of them knew what they were going to do and what they were going to be and how they were going to do it before they began university, and 70% of them indicated that they changed direction and spent more time in school and sustained additional costs as they worked towards establishing a career that they finally fell into. Many of them also further indicated that they anticipated that they would go back to school and that they would incur additional costs from time to time throughout their lifetime.

To people who have never sustained a physical, emotional or cognitive disability, life is full of opportunity and choices. To those of us who have never experienced a disabling condition, we consider changing our mind and exploring our opportunities as a basic human right. But these basic rights are available to us because of financial options and opportunities and are not available to people with disabilities who are dependent on a fixed, minimal pension. For some, the settlement resulting from future care costs is their only hope to having choice.

I run you through the story of Jeremy. Really, it was deemed by the health care professionals that his life was going to be very limited and that he was going to be a burden on society and his family for the rest of his life. He ultimately sustained a settlement, and through a tremendous amount of input from health care professionals, friends and community, and at a cost of $17,000 a year, pursued his dream of becoming as good an athlete as he could become.


New lives don't come cheap. It cost Jeremy $17,000 a year to continue his athletic career, which has progressed to the Paralympic level. It is what he learned in that pursuit that has given him the skill and knowledge to re-enter society, both vocationally and socially. Jeremy is married, has a job and is a world record holder in athletics. The Jeremy story is an unusual one, but it's a fair example to provide to you.

When you take away that right to go after dollars to provide people with options, the implementation of Bill 164, with all of its good points, guarantees that anyone who sustains injury in an auto collision has a future devoid of opportunities and choices. I urge you to withdraw that section, which is punitive to people who have experienced the problems Jeremy experienced.

Remember what I just said. They've had their primary asset taken away from them and we who are able-bodied are left with that asset, able-bodied and willing to get on with life. You've got to take that indictment off the shoulders of the people who have really been restricted to a very reduced lifestyle. Statistics Canada's health study indicates that 22% of people who identify themselves as brain-injured never ever leave their home; not to go shopping, for sure not to go to work, not even to go visit friends and relatives. That's why you need dollars to create opportunity.

If you go to the second column on page 4, "Access to Proper Rehabilitation," this is an interesting one. I appreciate your dilemma in attempting to construct the legislation, I really do, but look at it from our perspective. Until the inception of Bill 68, control of treatment and care was the obligation of health care professionals who had the best interests of the diseased party in mind. They ordered and directed and OHIP paid. Right? You went to your family doctor if you needed a program of rehabilitation. He ordered and directed it. It was provided and OHIP paid for it.

Bill 164, however, puts the financial gain of the insurer equal to the prognosis and diagnosis of a doctor and/or a referring health specialist. No longer is good health care contingent upon good medical-psychological decision-making skills; rather, it becomes the debating skills of the insurance, health care and legal staff against the practitioner who is looking after my best interests that determines opportunity for most appropriate rehabilitation.

At the Ontario Head Injury Association, we were under the impression that Bill 68 was designed to effectively remove the insurance companies' right to veto appropriate treatment and rehabilitation for persons who sustain brain injury in motor vehicle collisions. Although the government claims to remedy that with Bill 164, you've only been successful in making cosmetic changes to that aspect of the bill. For anyone who lives with cognitive difficulties as a result of a brain injury sustained in an auto collision, the arbitration-mediation process has become too complicated and intimidating for them to be capable of assessing it.

You've got to remember that here you've got a person whose ability to reason and make good decisions has been removed from him; 80% of auto insurance injuries will go in this direction, and now he's got to go to arbitration and mediation. They can't hire anybody because there's no money available for them to hire anybody, and they go up against Fred Smith, super-duper lawyer for XYZ Insurance Company.

When an injured person's doctor recommends treatment, according to Bill 68 it would appear that the insurance company is obliged to pay for that treatment. The patient is usually referred to a service provider for recommended treatment, which is not commenced until funding with the insurance company is arranged. There is no privity or contract or any vehicle for direct dealings with the insurance company and the service provider. The incredible power held by the insurance company over both the injured person and his service provider must not be underestimated and cannot be overstated.

The rest of this all ends up in Hansard anyway, but if you go to the top of page 6, it is still the burden of the injured person to wade through the morass of documentation and examinations and mediation and arbitration proceedings. When someone trying to adjust to the life changes caused by a brain injury has the added burden of dealing with the Goliath of Ontario's mammoth insurance companies, Goliath is going to win.

By forcing someone with a brain injury to take action of which he is incapable, the insurance company is effectively determining the treatment protocol for that person. In the event of a dispute, the insured person still needs to retain someone to aid his attempt to obtain the necessary funding for appropriate rehabilitation.

Although people in the employ of the insurer may assist the person with the brain injury in completing forms etc, it must be remembered that there is a conflict of interest as the insurance company's representatives are motivated to save costs for the insurance company. In any other profession, having an employee of the benefiting company assist a claimant in this manner would constitute a legal and ethical conflict of interest. However, under Bill 164, this is accepted business practice and it is really the only alternative open to someone with a brain injury.

If you go to page 7, the second column, "Loss of Future Income," if you review that, there's just more documentation of what I said earlier.

Then on page 8, the first column, "Standards and Regulations," I appreciate the intentions of the Honourable Mr Charlton in his recent announcement to establish regulations, but I want to address it here and I think it's appropriate. I appreciate his intentions and I have high regard for him as an individual. When it comes to health care matters, I had much more regard for the Honourable Frances Lankin, and I trust I will for Ms Grier as well; I haven't met her and don't know her. But we frankly were appalled that the Minister of Financial Institutions would get into the health regulations industry.

We trust that Ms Grier, while she's in Health, won't get into the Financial Institutions regulation and policymaking industry, and we have to plead with you to ask him to back off and to defer rather to the Minister of Health and to her coordinator of rehabilitation. She has a department that does nothing but coordinate and develop policy for rehabilitation. He can invite whomever he wants, and 80% of them can be insurance people if they have the kinds of backgrounds to create appropriate health care regulations, but please, I trust that was an error of judgement. I respect him immensely, but we've got to make an issue of that.

We thought maybe we were wrong and that maybe the people who had been appointed were truly experts in rehabilitation. We did a literature review in the health and medical journals and we couldn't find one article that any one of those had written that would demonstrate any level of competence or expertise in that.

On page 8 then, the suggested changes to the bill, at the bottom of the first column the first one is: scrap the announced task force. Ask the Minister of Health to have the coordinator of rehabilitation appoint a task force to develop standards and regulations for the rehabilitation industry.

Secondly, long-term care costs must realistically reflect the disabilities caused by brain injury. This can be accomplished by removing the monthly cap, and then going on from there.

Thirdly, settlements reflecting future economic losses and loss of opportunity for the injured person's lifetime must be allowed.

Next, the person determining the amount to be paid by the insurance company for home care and future care must have recognized expertise in the field of injury -- it's not just brain injury -- to ensure that these figures are realistic and fair.

In the instance where an injured person is required by the insurance company to complete forms or documentation in order to continue to receive benefits, the insurance company must pay for that person to consult independent legal counsel of his own choosing to assist him. This only makes sense. The person purchased the policy with the intent that the policy would be there to help him, and now he has to go out and spend money that he doesn't have in order to save his benefit.

Next, as with OHIP, arbitration and mediation should not exist. When I have a disease that falls under OHIP regs, nobody mediates and arbitrates and doctors don't bring in expensive lawyers to say I shouldn't have that treatment. I get it because it's needed. That's the way it has to be under the OMPP.


Next, should such a change to the act not be deemed to be in the best interests of the insured -- in other words, if mediation and arbitration continue -- then surely you have to allow legal services for the individual that match the skill and knowledge of the legal services employed by the insurance company. Obviously, it would be the insurance company that would pay the solicitor and client rates, because I'm the one who bought the policy in the first place, not the insurance company.

Next, the concept of mediation and arbitration to date has been foreign to health care within the province of Ontario. That's a repetition.

The next one on page 9, down near the bottom: Penalties incurred against the insurance company if arbitration remains must be severe enough to reflect what the injured party has suffered as a result of the insurer's refusal to pay.

Last, if the necessity of mediation and arbitration panels continues to exist with Bill 164, panel members should be required to consult with recognized experts in the field of traumatic brain injury and the insurance company should bear the costs of these consultations. We can't have well-meaning folks making decisions about very complex impairments and treatment models if they don't have identified and accepted skill and knowledge levels.

I appreciate the tremendous amount of energy your government has put into attempting to make this workable legislation. It ain't easy stuff. We trust you will listen to us carefully, because we represent the people who bought these policies in the first place and then unfortunately have to use them for what they were intended.

The Acting Chair: Questions. Mr Harnick, Mr Tilson.

Mr Tilson: Thank you, sir, for coming. Some of the issues you've raised are new and some of them have been rephrased. As you can imagine, we've heard all kinds of submissions around the province.

I was interested in the comment you made, particularly on page 8, about suggested changes to Bill 164. The government spent a great deal of time boasting about how it's going to have a task force that's going to deal with a lot of these questions that have been raised throughout these hearings, and I appreciated your thoughts.

I must say that my observation as a layman on this subject really is that it's as if they introduced a bill, then decided to think about it, then decided to consult and then decided to have task forces and other such things -- a very strange way of going about trying to change a law which they opposed in the first place and which is now perhaps even worse than the OMPP. Do you have any thoughts on that?

Mr Rempel: I really don't. My thoughts are on what's on the table here.

Mr Tilson: I realize that was probably a political question, but that's the nature of the beast. The question I found most interesting was the innocent accident victim, the head injury person, who may or may not be capable of dealing with insurance companies. It seems to me with the increased benefit proposals there are going to be more negotiations going on with insurance companies. Of course, the aim of this government was, "We're having too much going on in the courts and --

Mr Charles Harnick (Willowdale): Get rid of the lawyers.

Mr Tilson: "Get rid of the lawyers," Mr Harnick says, and that's quite right. That's what their philosophy has been. It's as if we're getting rid of one advocacy and replacing it with another advocacy.

Mr Rempel: Our concern on that is that as the innocent victims and the persons who paid out the bucks for the auto insurance policy, we need to ensure that we have an advocate with the skill and knowledge equal to the skill and knowledge on the other side. The other side unfortunately happens to be the insurance company. They should be on our side, but they aren't. That's not been our experience.

Mr Tilson: Let me tell you what the parliamentary assistant has told these proceedings. The parliamentary assistant has suggested that there's going to be perhaps an expansion of the advocacy legislation and that those types of individuals will be representing the very people that you are concerned about.

Mr Owens: That's not what I said.

Mr Rempel: He says that isn't what he said, but if that's true, then those people need to be the same people that the insurance company employs.

Mr Mancini: Don't be intimidated by the parliamentary assistant.

Mr Tilson: Ignore him. He doesn't know what he's talking about half the time. He just babbles on.

Mr Rempel: Mr Chairman, this is a good point. The point that we're trying to raise is that if 24-year-old advocates are hired at $40,000 a year, that's fine, but then the Royal Insurance Co is compelled to hire that same person. If you guys start bringing in $300,000-a-year lawyers, then the insurance company can as well.

Mr Tilson: How much time do we have, Mr Chairman?

The Acting Chair: You've got less than 30 seconds.

Mr Tilson: Mr Harnick has a quick question.

Mr Harnick: The government, I think, is going to try to implement some kind of an advocacy scheme, much like we have at workers' compensation, where an injured worker is given a worker's advocate. At workers' comp, they're not going in against the lawyer from Royal Insurance, the lawyer from State Farm or Allstate. I know you used to work in the insurance industry. I know what you had to do to look after Jeremy. What would have happened if you had been given a worker-adviser to look after your case? Where would Jeremy be today?

Mr Rempel: Our family would probably be on welfare, because we were financially broke by the time we got to court. It was a private loan by a family member that saved us.

Mr Harnick: Thank you.

Mr David Winninger (London South): You're actually one of many presentations on behalf of the Ontario Head Injury Association which we've heard over the last few days in various parts of the province, and there seems to be kind of a pattern emerging.

First of all, the head injuries association seems pleased that we've lowered the threshold for pain and suffering. I know the head injuries association actually agrees that there should be a threshold; others don't.

Your association also seems pleased that we've increased the provision for lost earnings during disability following an accident, with indexation, with extending the definition of injury to include mental and psychological injuries as well, and lifting the lifetime cap for rehab.

The points that seem to be controversial are removing the $3,000 monthly cap for rehabilitation, allowing suits for economic loss. When we've spoken to some of the insurance representatives they have said, "Of course, we can fashion a Cadillac plan for you, but it's going to mean that your premiums will skyrocket." So as you know, government walks a fine line between ensuring affordability of auto insurance premiums and at the same time expanding access to improved benefits. So it's obviously a balancing act.

I would point out to you, however, and you're probably aware of this, that our Bill 101 on long-term care certainly has some impact on the kind of care that someone who is disabled, for whatever reason, would receive.

Mr Rempel: For a brain injury it's minimal.

Mr Winninger: That's certainly open to debate, but certainly that's an initiative, as well as our employment equity initiatives to reintegrate disabled people into the workforce, the Ontario Training and Adjustment Board --

Mr Rempel: Those are all good things. I don't dispute that.

Mr Winninger: They're designed to ensure that people have the options they're seeking and a normal life, which are two goals that disabled people --

Mr Rempel: If I can respond to that just briefly, they're better than nothing, but as I was stating earlier, the problem that you've got is these things are available when money is available and they're available when you have a case manager who understands you and so on and when you have the freedom of choice. If my neighbour's kid who just graduated from Brock University had had to find money and consult with an MSW over at the Ministry of Community and Social Services every time he made a change in his curriculum, he wouldn't be graduating for another six or seven years.

So it's better than nothing, and I don't belittle that. It's an important part of our social fabric, but to take away things that help you normalize and get on with life as quickly as possible, you really need to be careful before you take those things away from an innocent victim who paid for insurance in the first place.

Mr Winninger: One of the problems that I personally have is that the tort system was not perfect. Many people acknowledge that.

Mr Rempel: I would.


Mr Winninger: Your recovery was often delayed, and we've heard about patients languishing with inappropriate long-term care and rehabilitation as they await their court awards. We've heard about cases where people recovered nothing because the party wasn't found at fault, and I know myself people have come to me, members of families where someone's been rendered quadriplegic, but it was a single-car accident where the car went off the road. I'm just wondering what your association would offer for those people who don't have a tortfeasor who can be found at fault.

Mr Rempel: We say quite clearly that when a person is victimized, expectations, I think traditionally and we would hope in the future, would remain different for a person who's been victimized than for a person who is at fault. If that person who is at fault decides beforehand to purchase the copious amounts of insurance to take care of his carelessness, that's another issue, but for those of us who spend the money to purchase what we trust will be insurance that will help alleviate the economic loss and the pain and suffering and so on -- you know what I'm saying? That's a different kettle of fish.

Mr Winninger: But not everyone gets struck by a drunk driver.

The Acting Chair: Thank you very much. Mrs Caplan.

Mr Harnick: I hope the parliamentary assistant heard it, but he's so busy talking to the government flack.

Mr Winninger: Is that a new --

The Acting Chair: Mr Mancini, Mrs Caplan, Mr Phillips.

Mr Owens: On a point of order, Mr Chair.

The Acting Chair: Mr Mancini, go ahead.

Mr Owens: On a point of order, Mr Chair.

The Acting Chair: Mr Mancini, proceed.

Mr Owens: A point of order, Mr Chair.

The Acting Chair: On a point of order.

Mr Owens: Thank you, Chair. If Mr Harnick is including his colleague Mr Tilson as a government flack, I would --

The Acting Chair: It's not a point of order, Mr Owens. I would remind all members of the committee that people from the public in Ontario have made an effort to come to these hearings to try and get their views expressed. I would ask, without singling out any committee member, that all committee members give them the respect they deserve. This is a very important issue, and there is no point having bantering and back and forth, arguments between committee members. Quite frankly, the members of the public can watch that on television during legislative debates. This is our one opportunity to hear from the public, and I would request sincerely that all members respect that. Mr Mancini, your questions.

Mr Harnick: Point of order.

The Acting Chair: On a point of order.

Mr Harnick: Does that mean the parliamentary assistant should be paying attention to what the witnesses are saying?

The Acting Chair: It's not a point of order. Mr Mancini.

Mr Owens: Mr Harnick should stop making speeches --

Mr Harnick: You can't muzzle Kormos; you won't be able to muzzle me.

Mr Mancini: Ray, it's nice to see you again. It was a pleasure working with you in the past, and it's good to see that your association is still endeavouring to do the many important things that people with head injuries need to have done in this province.

You've not had the privilege, if I can call it that, of attending the committee prior to today and travelling with us across the province, but I should tell you that during these hearings, every time there was a group, individual or organization that came before us that had questions for the government that it was unable to answer or hadn't clearly thought out, the government members threw out the line that this task force has been created and it's going to resolve all these problems. Well, so much has been swept under the rug for this task force to do that I think it's going to be the longest-standing, longest-serving task force in the history of our province by the time it gets to answer all of the questions individual witnesses have in fact asked.

You have been the only one, to my recollection, who has stated to the government members to scrap the task force. Given that so many individuals and groups have been promised some type of standing with this task force -- and that's not to say whether I'm in favour or against it -- and given that so many unanswered questions still remain and so much work needs to be done, do you still think it would be in the best interests of all concerned for the government to scrap the task force?

Mr Rempel: Definitely, as it comes to health care regulations, for sure, because I very respectfully believe that that's got to occur within the venue of the Ministry of Health. It has to. As to the others, I would only have a plea to the government that you're doing something that is really going to have long-term effects, hopefully very positive effects, on the people of Ontario, and that you take your time and that it gets done correctly. If that means scrapping the task force and going back to the drawing board, I think that should happen.

Mr Mancini: You said earlier on that you would be quite annoyed if the new system pitted young, inexperienced advocates against highly qualified professionals who were paid the resources necessary to obtain even further expertise. I agree with you, and I have said since the opening day of these committee hearings -- I don't know, have you had a chance to see these 68 pages of regulations, Ray?

Mr Rempel: Yes.

Mr Mancini: What do you think of them?

Mr Rempel: I haven't memorized them all. I'm sorry.

Mr Mancini: What do you think of these 68 pages of regulations? Think back on the difficulties you faced a few years ago and think back whether or not you as an individual, or friends or acquaintances etc, would be able to ensure that their rights --

Mr Rempel: That's why we make the statement, and we tried to make it as strongly as we could, that you have to have equal representation on both sides of the issue. Frankly, if I'm the injured party, I want Bert Raphael on my side; I don't want a 30-year-old, $45,000-a-year person, because Bert Raphael knows how to get things done and I respect him immensely, but I ain't going to get him for $40,000 a year.

The Acting Chair: Thank you very much, sir.

Mr Mancini: I didn't finish my five minutes, Mr Chair.

The Acting Chair: Yes, you did, Mr Mancini. In fact, you're over five minutes.

Thank you very much for your presentation. We'd like to thank the Ontario Head Injury Association for coming forward and you, sir, for very effectively presenting their views. We trust you'll stay in touch with the committee as this legislation progresses through the process. Thank you very much.

The Ontario Risk and Insurance Management Society, if they're here, come forward and take a spot by the microphones, please.

Mr Tilson: Mr Chairman, could I speak on a point of order? We're sitting in this room, it appears, today for these hearings. I'm a little concerned that room 151, which is vacant and which I recall, in the subcommittee meetings at least -- I know you weren't privy to that -- it was agreed --

The Acting Chair: Mr Tilson, that's not a point of order. We have witnesses who have made a point to visit this committee room on a schedule and the minute we have not got witnesses to appear before this committee is when we will discuss other matters. Thank you, Mr Tilson.

The next witness is the Ontario Risk and Insurance Management Society. If you would identify yourself, please --

Mr Tilson: You didn't even give me the courtesy of listening to my point of order. You haven't even listened to it.

The Acting Chair: -- and proceed with your presentation. Thank you very much.

Mr Mancini: Mr Chairman, you're treading on very thin ice.

Mr Tilson: You're absolutely out of order, Mr Chairman. You won't even hear my point of order.

The Acting Chair: Go ahead; proceed.

Ms Susan Meltzer: Good morning, Mr Chairman and members of the committee --

Mr Mancini: If you guys think you can get away with that, you've got another think coming. You're treading on very thin ice.

Mr Tilson: This is outrageous.

The Acting Chair: Proceed. I am sorry you have to be privy to this. I know how important it is to you. If you would just proceed.

Mr Mancini: I'm sorry she can't be on television so tens of thousands of Ontarians could hear her.

The Acting Chair: Proceed, please.

Mr Tilson: You people just don't want anyone to hear her.

The Acting Chair: Proceed with your presentation, if you wouldn't mind.

Mr Tilson: You're putting it in the back room of the House.

Mr Mancini: Shame on all of you.

The Acting Chair: Could you just proceed? Thank you very much.


Ms Meltzer: Good morning. My name is Susan Meltzer and I'm an associate director of risk and insurance for Bell Canada. Today I'm representing the Ontario Risk and Insurance Management Society, as a member of which I've been involved in monitoring the issues regarding automobile insurance since 1986.

Our organization has approximately 186 corporate members who are interested in developments that can affect our costs of risk of an insurable nature or substantially assist us in maintaining adequate insurance protection. We are major purchasers of automobile insurance in Ontario and our membership can affect the insurance marketplace where other purchasers may not. We have a collective knowledge regarding insurance products and we believe our statements are representative of the interests of virtually all automobile insurance purchasers.

On behalf of our members, we continue to review insurance industry practices and we share our views with the insurance industry in the hope of making changes that are beneficial to the consumer of the insurance product. In addition, many of our members operate large fleets of commercial vehicles and, as such, are vitally interested in reformation of the compensation system that could increase cost-effectiveness of our corporations. We also consider ourselves to be good corporate citizens and we support an automobile insurance plan that provides adequate, fair and quick compensation to those involved in automobile accidents.


Risk management as a discipline advocates that the most effective way to manage risk is through loss control and preventive measures. In keeping with this, ORIMS believes that a sound program that emphasizes road safety and ultimately the reduction of frequency and severity of losses is of utmost importance. Many of our corporate members have instituted successful driver training and safety programs, and we would be happy to consult in the future with the government in its deliberations on this issue.

We also share society's abhorrence of the behaviour of drivers who abuse the privileges of the road and drive while under the influence of drugs and alcohol. We commend the government for continuing to provide additional deterrents by exempting these individuals from some of the coverage available under the new automobile insurance product. Losses that cannot be prevented but are minimized by risk control for us are then financed; hence our interest in the issue of changing the current compensation system.

ORIMS has been supportive of the OMPP throughout the debates on automobile insurance. They've carefully reviewed the material which was distributed by the government and recognize that you have decided upon a new objective. In addition, however, we believe that Bill 164 will increase the costs of providing for accident victims, which will impact the insurance industry and ultimately the consumer.

We don't wish to spend your time reiterating why we believe the government should maintain the status quo. Rather, having reviewed the objectives, we would like to offer a number of suggestions that could partially meet your objectives by minimizing some of the costs under your current proposal.

We have serious concerns about the government's plans to provide for unlimited rehabilitation, medical and long-term care benefits. Although we wholeheartedly agree with the necessity to restore an accident victim back to his original position, we feel that unlimited benefits which are not subject to periodic formal assessment could provide a system which would be fraught with abuse.

It is imperative to limit potential abuses of the system in order to keep down losses and premiums, and we see two areas where the system is vulnerable. Both the OMPP and Bill 164 provide an opportunity for accident victims to fraudulently collect benefits. Although the insurers are currently monitoring the validity of the claims, there appears to be a reluctance on their part to be aggressive in the denial of benefits for fear of criticism under the current regulations. It is important to the overall cost of the system that only those accident victims who truly require such benefits are compensated.

We suggest that there be a formal mechanism whereby an insurer can request an impartial review of particular cases to ensure the validity of those claims. Under Bill 164, the provision for unlimited rehabilitation, medical and long-term care benefits is a prime opportunity for those accident victims who choose to work the system. There needs to be a formal adjudication, based on the amount of money expended as well as the length of the rehabilitation, to ensure that unnecessary benefits are not paid.

We therefore suggest that the bill be amended so that unlimited rehabilitation, medical and long-term care benefits are available only after an objective review. Justifiable costs should be paid until such time as $500,000 has been expended or two years has passed since the accident, whichever comes first. At that time, the legislation should provide for an independent assessment to determine whether or not benefits should be continued. This assessment could be based on the extent of the injuries and the commitment of the victim to his or her rehabilitation.

With respect to income replacement benefits, we agree with the increase in maximum benefits and the use of an inflation index for the future. The provision for all economic loss within a schedule of accident benefits will provide for fair compensation to accident victims as well as an increased ability to project accident costs.

In some instances, however, insurers are charging premiums for accident benefits to drivers who are adequately covered through their employers' health programs. We recommend that the system be amended so that those drivers can opt out of coverage for accident benefits for themselves, their spouses and their resident dependants. In other words, the automobile insurance policy would provide no coverage to that insured and his or her family. Premiums currently being paid by insureds for the excess coverage in the system would be waived. This model is currently in use in the Michigan no-fault system and is successful in reducing costs to individual drivers whose employers have substantial corporate accident benefit programs.

With respect to access to the courts, the government has stated that it is its goal to expand the right to seek retribution for wrongdoing by allowing accident victims to receive recognition for their special losses. I quote from the government's January pamphlet, where it said, "Expanded access to tort for non-economic losses, or `pain and suffering,' will be available to seriously injured accident victims who can prove in a court of law that another person is at least partially at fault." That is supposed to be attained by the imposition of the $15,000 deductible.

We have two issues with this change.

It is the stated objective of the government to increase the number of accident victims who can access the court for non-economic loss. At the risk of saying what everybody else has said before you in the past weeks, it must be understood that this cannot be done without cost. The results of actuarial reports commissioned both by the government and the industry are based only on future projections and assumptions and cannot be relied upon as firm predictions of the future.

We were not able to commission our own reports, but we have reviewed the reports commissioned by the government and the Insurance Bureau of Canada, and it only appears obvious to us that increasing the number of lawsuits and the amounts of the settlements will certainly increase the cost of providing compensation and, ultimately, the cost of insurance.

Secondly, we do not agree with the concept of the use of a deductible to ensure that only seriously injured persons are allowed access to the courts. In its own analysis, the government states that one of the problems with the tort system is that "the skill of the advocate affects the extent to which the injured party is awarded tort compensation." We believe that the skills of plaintiff's advocates will circumvent the imposition of the deductible by increasing the damages being claimed to ensure that the ultimate award is well in excess of the applicable deductible.

If the stated objective is to ensure that seriously injured victims are allowed access, we then reiterate our recommendation to Mr Justice Osborne that a verbal threshold be instituted to determine those victims who are allowed access to the courts for non-economic damages.

Our recommendation is that, with respect to tort exemption for non-economic loss, recourse to the courts be restricted to claims involving death, permanent impairment of a body function or permanent significant disfigurement. Access to the courts should be restricted to those who cannot be rehabilitated.

You will note on the bottom of page 6 we have provided a definition of permanent impairment of body function and permanent significant disfigurement. We do believe that this approach meets your objectives in the reform of the automobile insurance system without allowing for abuses from victims who have marginal injuries but can afford to hire skilful attorneys. While this approach will not necessarily increase access to the courts by as many accident victims as is contemplated by Bill 164, it will ensure that those victims who do access the court for non-economic loss are truly eligible to do so.

We emphasize that we recognize that Bill 164 is designed to provide additional benefits and payments to accident victims and will ultimately increase the cost of the insurance product. Our recommendations are designed to temper the ultimate cost to the commercial and personal consumer. Bill 164, amended as suggested herein, is acceptable if it is only a secondary goal of the reforms to ensure that all purchasers of insurance participate in the funding of the rehabilitation of accident victims. It will not further the objective of decreasing the current levels of insurance premiums.

The Acting Chair (Mr Winninger): Thank you. We have five minutes for each party. We'll start with Mr Owens.

Mr Owens: I'd like to thank you for your excellent presentation and your suggestions for amendment. My first question to you is with respect to the independent medical examination. Now, under section 47 of our regulation we've provided for a process by which an independent medical examination can be requested, and again if there's a dispute, there's a process that will occur. Does that address your concern that you've raised here today?

Ms Meltzer: Not exactly. We looked at the --

Mr Owens: How can we make it more comprehensive, in your view?

Ms Meltzer: Well, we looked at the provision. I believe the way I read it was the insurance company would look for an independent assessment. What we're looking for is that the independent assessment be automatic so that all cases are reviewed. It's not up to the insurance company to trigger that.

We're afraid that their fear of the regulations where they're supposed to be responding quickly, getting benefits out, is getting them to be paying benefits a little more easily than they might have and ultimately increasing the cost. Rather than leaving it up to the insurer to ask for the independent assessment, we're saying there should be an automatic way where all cases are reviewed, because we're concerned with the fraud issues.


Mr Owens: I don't think anybody in this room on either side of the table or those present in the audience today would disagree that we're all concerned with people who are ripping off the system. It concerns me. Correct me if I'm wrong, but it appears that you're saying at this point there is a lot of fraud occurring. What is your experience with respect to that?

Ms Meltzer: We're seeing situations where, because of the necessity to rush through the payment process, because of the time insurers are supposed to be spending doing this -- it's not a massive fraud that we've seen -- the insurance company isn't questioning each claim as much as it might in order to meet the current regulations.

Mr Owens: So from a risk management perspective of the claims, although you deal with the front of the issue in terms of attempting to minimize the risk that would cause the company to have an accident experience to deal with --

Ms Meltzer: We also buy the insurance on behalf of the company.

Mr Owens: That's right. Exactly.

You indicated at the beginning of the presentation that you're representing ORIMS, but you also work in a position with Bell Canada, a large employer. I don't know if this is publicity, but in terms of the kinds of driver training that is provided by that company to employees who are involved on the roads, do you see that road safety, in terms of managing the risk experience, is an important element with respect to minimizing claims experience, and do you support our process in Bill 39 with respect to the road safety agency?

Ms Meltzer: Yes, we do. Bell and other members of ORIMS have extensive driver training, defensive training programs and reward bonus scenarios for safe driving. We understand fully the impact of lessening losses.

Mr Phillips: I'm just going to serve notice to the Chair that I think we'll want an answer on why we're not in the Amethyst Room before we adjourn this morning.

My question is around the finances of this. As I look at it, the cost of this bill will be somewhere between $200 million, which is what the government estimates, and the smallest estimate I've seen from the industry is $400 million, which is going to be the increase in the premiums. As I say, the minimum is $200 million and the lowest estimate I've seen from the industry is $400 million.

For us in the opposition, it's an unusual look at the priorities. As you know, the government has said it can't understandably increase funding to hospitals or schools or anything like that because the taxpayers just don't have the money to fund it, but the people of Ontario do have $400 million more they can pay each year to buy this package. That's essentially what we're looking at in my opinion, $400 million to buy Bill 164. I will just serve notice to the government that every time somebody says you can't afford something, I'll say, "We spent $400 million on this package."

Your organization represents employers who have an enormous number of employees, as I look at it. I realize you're suggesting improvements for Bill 164. What is your recommendation to us in terms of what costs you think are associated with this bill? I realize you said you haven't done a complete analysis of it, but what is your organization's judgement on the increased cost?

Ms Meltzer: When you're dealing with projecting figures the way Mercer and Wyatt did for the respective organizations that hired them, that is all based on the assumption that history's going to repeat itself. In order to go forward and say it's going to cost $200 million or $400 million, I think that's a relatively facetious thing to do. History tends to repeat itself in the statistics of losses. To be quite honest, I don't know. I do know that it will increase costs. I do know that with respect to our organizations, we would expect to be in court with accident victims more than we are now, but I don't have an estimation of the costs.

Mr Phillips: What would be your judgement? As I looked at your organization, I assumed that your organization was trying to look at various benefit packages and trying to estimate the costs of them. Your organization hasn't looked at the studies?

Ms Meltzer: We are coming to you with our experience in continuously dealing with claims and insurance companies. We're not statisticians or actuaries, so I don't have an estimate of the cost.

Mr Phillips: That's interesting to me. In terms of your organization's judgement -- because I think my own judgement is that there are two choices here: We stay where we are with the existing legislation, or the government chooses to proceed with Bill 164. I think every time rates go up, the people who will be phoned on those rate increases will be the NDP members, but none the less, what would be your recommendation to us, if those are the two choices, leave things as they are or proceed with Bill 164?

Ms Meltzer: We very clearly stated in our paper that we have supported the OMPP in the past and that we continue to support it. However, if there's going to be a change in the objective, we would like to make these recommendations, but we have supported OMPP in the past.

Mr Phillips: So your recommendation would be to stay essentially with the existing legislation and maybe make some modest changes. Do I have any additional time, Mr Chair?

The Acting Chair (Mr Bob Huget): You've got about one minute.

Mr Phillips: Again, I'm kind of interested in the climate out there, because we've had a lot of experts on the bill and what not, but you represent a large number of employers. How should we view the impact of what I regard as substantial rate increases on the companies that your organization represents? Is it something that we should be very worried about, or is this something that can be relatively easily managed?

Ms Meltzer: Obviously, all major corporations in the 1990s are making sure that they can reduce their costs to the extent possible, and an 8% increase in insurance premiums to a corporation is a large number. We're spending a lot of money on insurance, and I'm not saying it would threaten the viability of the corporations, but it would certainly add to the difficulty of being competitive in today's environment by increasing costs.

Mr Harnick: You state on page 4 in your brief that the provision for all economic loss within the schedule of accident benefits will provide for fair compensation to accident victims. Let me give you a little scenario. If a person aged 35, married with a spouse and two children and earning $45,000 a year, is killed in a car accident, the Bill 164 generous provisions would pay that family the equivalent of about $117,000 based on the dependency perceived by this government for the rest of that family's lifetime. Do you think that's fair?

Ms Meltzer: I think it's very difficult to blend tort and --

Mr Harnick: No, no, that's not what I asked you. Do you think that's fair? Is it fair if you were in that position and you were the surviving spouse that you were going to get $117,000 to look after your two children, pay the mortgage, pay for the car, pay all of the household expenses, $117,000, maybe three years of what that breadwinner was worth?

Ms Meltzer: We've reviewed the bill and think, on balance, that yes, this is the way to go.

Mr Harnick: So you think that's fair, okay.

Ms Meltzer: On balance.

Mr Harnick: Okay, as long as I know that's what your idea of fairness is. Thank you.

Mr Tilson: If I could continue on the topic of long-term care, there's been a great deal of concern from different types of groups on the whole subject of long-term care. Much of that concern is concerning the uncertainty of the regulations, what they mean, what the intent is. I don't know whether you've had a chance to look at them. They're very complicated; at least from my perspective they're very complicated. It's a very complicated document to interpret.

Having said that, if you look at the principle of emphasis on benefits, the principle of this government is that we're all the same, that we all have the same lifestyle, we all have the same home life. Having looked at that difference, is it possible to list all the expenses that one can receive for long-term care?


Ms Meltzer: I think that would be very difficult to do. I think this is why we're looking at understanding what the government's trying to do in Bill 164 by making it unlimited to ensure that provision was there to pay for those benefits. However, one person's needs, as you point out, aren't another's, and this is why we think there needs to be a more formalized review of that process. That's all we're requesting.

Mr Tilson: I don't think it's possible to list all those expenses and I think the insurance companies will go crazy, because they simply won't be able to put forward figures that will be able to adequately pay for all of these types of expenses that may surface as time goes on. That's one of the advantages of the tort system, that you can look at each individual case.

I'm not saying return to the tort situation; I'm simply saying that the other extreme is to go into benefits, and I say it's impossible to list what your expenses might be or what my expenses might be on a general basis, or everybody's expenses in this room for example. We all have different needs, we all have different lifestyles, and probably under the benefits system, all of us -- most of us -- will not be satisfied. Is that a fair assumption?

Ms Meltzer: I would suggest that if the objective is to set out a no-fault system, whether it be OMPP or Bill 164, you're going to have some inequities when you're setting out an accident benefit system. However, on the overall ability to deliver income replacement benefits in particular in a quick manner to accident victims, the no-fault system is obviously the way to go. In my view, on the issue you're talking about, there's very little difference between the OMPP and Bill 164.

Mr Tilson: I don't think the insurance companies will be able to deliver all these things because I don't think it's possible to list all the possible expenses, and if they keep changing the regulations as time goes on and keep adding and adding and adding, the cost is going to be completely unbearable, which leads to my next question, and that is the one of disputes.

Under the tort system, two parties or their insurance companies go to court if they can't settle and they fight over things. Of course, that was one of the alleged reasons that the system collapsed, and we could debate that one for and against for a long time, but it gets now to the system which seems to be developing under Bill 164, and that is again more emphasis on benefits.

For the insurance companies, it's going to be tighter and tighter and tighter for them to operate, for just some of the reasons I have listed even in my first question. Therefore, would you not think that the litigation or the disputes as to whether one qualifies for such-and-such benefits -- maybe there's a dispute between the insurance company as to whether you're going to go in such-and-such direction of long-term care, and they'll be off to mediation and the insurance commission will expand. Do you feel that possibly the whole issue of the adversarial system will expand under the principles that are being set forth under Bill 164?

Ms Meltzer: It depends to what you're making your comparisons with. If you're making your comparisons to Bill 164 to tort, then there's certainly going to continue to be less activity in the courts than there was under the tort system. As we stated in our brief, if you compare Bill 164 to OMPP, yes, we agree that there will be more court activity.

Mr Tilson: I say this government is going to --

The Acting Chair: Thank you very much. I appreciate the presentation you've made this morning on behalf of the Ontario Risk and Insurance Management Society. You've certainly generated some important dialogue among the committee members, and I trust that you'll stay in touch with the committee as it continues on through the process, up to and including reintroduction into the House of Bill 164. Thank you very much for our presentation and thank you for providing your time this morning to the committee.

The Acting Chair: The next group is the Allstate Insurance Co of Canada. Good morning.

Mr Tilson: Mr Chairman, as we're waiting, my party also was concerned that somewhere prior to breaking for lunch we again return to the subject of why we're not in room 151.

Mr Owens: Why don't we turn to it right now?

The Acting Chair: We'll return to that subject when the business of the committee has been concluded, and that is the business of hearing witnesses.

Mr Tilson: We will conclude at the end of this day. I say, sir, that we should be doing that now.

The Acting Chair: We will finish --

Mr Tilson: There is no reason why room 151 cannot be used, because it's empty. You're trying to hide this subject.

The Acting Chair: We will finish the presentations this morning. People have made a very serious effort to get here and proceed on a schedule, and we will do so.

Mr Tilson: The room is empty now.

The Acting Chair: Proceed with your presentation. Thank you very much.

Mrs Elinor Caplan (Oriole): On a point of order, Mr Chairman: I believe it is a legitimate point of order for members of this committee to request that this committee be held in the Amethyst Room so that the public interest can be served. That had been agreed to by the subcommittee. It is therefore a legitimate point of order to ask the Chair to review the subcommittee's recommendation and request that this meeting be moved to the Amethyst Room.

The Acting Chair: Thank you. We'll discuss that kind of business once this presentation is concluded. Would you proceed with your presentation.


Mr Terry Kelaher: Thank you for allowing us to present our views about the proposed legislation. Joining with me today are François Boulanger on my right, who is responsible for our casualty actuarial area, and on my left, Jim Bowles, who represents our claim delivery system.

I think I better take you through the pile of papers the clerk delivered to you just prior to our presentation. The notes in the black binder are the detailed brief we have prepared. I would suggest you may wish to go through that at your convenience. The other packet includes notes on my oral presentation, but more important, some exhibits I'm going to refer to as we move through some of these notes.

Our comments and recommendations to these hearings result from our company's extensive study of its provisions since its introduction, our active participation with the Insurance Bureau of Canada and various government agencies throughout the consultative process and Allstate's extensive experience with other insurance systems both in Canada and the United States over many years.

We rank among the top 10 Canadian automobile insurers, servicing almost one million policyholders across all provinces and territories.

Within our detailed written brief we cover four main areas that we have decided to comment on: Allstate's costs and profitability under the present Ontario auto system; Allstate's assessment of the government's study of the costs of Bill 164 and our ability to absorb them; Allstate's assessment of the claim delivery process currently in place; and the serious claims handling problems introduced by the implementation of Bill 164 as we see them at Allstate.

As I mentioned, we've also provided you with a separate kit containing five exhibits, along with the notes I'll be referring to this morning.

In the interest of time, my oral presentation will concentrate on the area of costs, profitability and our ability to absorb the additional costs of Bill 164 with minimal change to our existing premium levels; in other words, the whole issue of affordability.

As a general statement, we support those enhancements to the Ontario automobile insurance system that will provide improved levels of compensation to all motorists and injured victims while not imposing significant and/or unaffordable premium increases or overcomplicating the delivery system for consumers.

We developed a very healthy respect for our customers' ability to understand and accept premium increases during the mid-1980s. We discovered in spades that the level of price increases from year to year and absolute premium levels are the two hottest buttons to fool around with. Consumers want stable auto insurance premiums, and any time you want to increase prices beyond the perceived acceptable level, you had better be prepared to explain yourself and your actions in great detail. Even then, don't expect much acceptance or understanding.

We learned this lesson during the period of time illustrated in exhibit 1. Referring to this exhibit, you can appreciate why Ontario drivers were so angry during the mid to late 1980s, anger which led to the arbitrary rate freeze in 1987 and the resulting market withdrawal and Facility Association overpopulation. This was caused by the uncontrollable and very unstable costs of the tort system which Bill 164 proposes to reintroduce.

You will also note that due to conditions which I will now start to describe, we are completing our application to the Ontario Insurance Commission for a rate increase of 8% in the first quarter of 1993.

Turning to exhibit 2, you can examine Allstate's actual average claims cost per vehicle during this same period. Placing exhibit 1 beside exhibit 2, you will notice that the rate increases or decreases tend to lag the experience by about a year. You can also see how the costs continued to build during the period of the rate freeze and why the Ontario Automobile Insurance Board concluded that prices would have had to increase by 30% had it not been for the introduction of the Ontario motorist protection plan in 1990.

Notice the significant reduction in average costs starting in 1990 and continuing through 1991. This was not entirely due to OMPP. It was also heavily influenced by the recession. During a recession people drive less, there are fewer cars on the road and there are therefore fewer and less severe accidents. You should also note that the reduction bottoms out in 1991 and we experienced a 6.3% increase in average cost per vehicle during 1992.


This increase, combined with the reduction in our investment income resulting from lower interest rates, the cost of depopulating the Facility Association, the residual impact of the introduction of the 3% premium tax and the anticipated increase in accidents during the expected economic recovery is why we, like many in our industry, find it necessary to obtain approval to increase our rates.

This is extremely important, because all of the government's case around affordability is based on the assumption that the industry's currently reported profit levels are a reflection of its ability to absorb the additional costs of Bill 164 with very minor adjustment to our premium base.

As you can see in exhibit 3, this is just not the case for Allstate. The factors mentioned earlier will move our combined ratio, which is a combination of the loss ratio and our expenses, from the very profitable levels of 94.9% in 1991 and 99.5% in 1992 to the considerably less profitable levels of 108.8% in 1993 and 115.4% in 1994. A combined ratio of 104% would provide us with an acceptable return on equity in yesterday's investment environment. A ratio of 120% would put us in a total loss position like we were from 1985 through 1989.

This difference between our results and the government's expectations is not surprising, given that its actuarial study did not use the actual experience under OMPP but chose rather to use assumptions based on pre-OMPP experience and the experience of other jurisdictions like Quebec.

For example, turning to exhibit 4, Allstate's actual experience for the disability income coverage develops a significant difference in cost as compared to Mercer's estimates. Our cost is 84.1% higher or $52.65 per vehicle.

One of the reasons for this difference is illustrated in exhibit 5. Mercer didn't have the actual disability experience available to it at the time it did its study. They chose to rely on the experience of the Quebec system and based their model on the pattern developed by the Régie de l'assurance automobile du Québec. As you can see, the number of claimants still disabled under OMPP after 27 months is roughly double that of the Quebec experience.

We have commented in our brief on a number of other assumptions used by Mercer with which we cannot agree.

We are absolutely convinced that the model on which the government has based its assumption that the industry can afford to absorb the additional cost of Bill 164 is totally inaccurate and does not come close to reflecting the costs of the current system, let alone the extra burden imposed by Bill 164.

The combined effect of our current premium deficiency of 8% and our conservative estimates of the additional costs of Bill 164 will result in premium increases of between 20% and 25% to our customers. Asking the drivers of Ontario to accept this is to invite both political and business repercussions, and who can blame them? Costly changes like those contemplated in Bill 164 just aren't warranted.

We've outlined in our brief the areas where we believe OMPP significantly improved the system of auto insurance and we've also pointed out where we believe there are major deficiencies. We have included recommendations to improve the existing system that are quite simple and easy to introduce.

We have also included our comments on the complexity of the proposed claims-handling procedures in Bill 164. The proposed procedures, when combined with the return to a tort environment, will return us to the old days of uncontrolled increases in cost and total customer dissatisfaction. We will be forced to return to the adversarial system where insurance companies are pitted against their customers and their lawyers.

In closing, I'd like to now cover briefly the summary and recommendations section of our detailed report.

First, Allstate supports enhancements to the current Ontario automobile insurance compensation system that would provide improved benefits for all accident victims while maintaining premium levels that are affordable and acceptable to Ontario consumers.

We believe the overall average required premium for Bill 164 of $862 as stated by Mercer is significantly understated for five major reasons. We estimate that difference to be between $80 and $120 per vehicle or between 10% and 15% based on Allstate's required premium levels. This translates into additional premium required from Allstate customers alone of between $18 million and $27 million.

Our experience and research clearly indicate that premium stability and the absolute level of premium are of prime importance to our customers. It seems unconscionable to force rate increases of the magnitude contemplated by Bill 164 when inflation is running as low as it is, record numbers of Ontarians are without work and disposable income is either static or declining because of wage freezes and tax increases.

Allstate does not believe it is in the best interests of the consumer to impose uniformity of class plans due to the extreme premium dislocation that would occur. Elimination of age, gender and marital factors can be achieved through individual company class plan management over an extended period of time.

We strongly advocate coordination of all available resources to champion the cause of road safety that will reduce road crashes and their related carnage and the physical damage, destruction and resulting costs to the health care, insurance and social systems. Graduated licensing is one of the answers contemplated. Who knows? With that in law, it might have prevented the tragic accident that occurred in Guelph this past weekend.

We are concerned that the complexities inherent in claim service delivery under OMPP have been significantly compounded by Bill 164, with potential consequences both for timely, accurate handling and for increased operating costs to meet those adjustments.

Allstate also believes that expansion of tort concepts provided under Bill 164 will introduce serious cost and claim delivery complexities.

Restoring non-economic general damages is retrograde and fundamentally wrong since it promotes prolonging treatment, disability periods etc, contrary to the current system that focuses on healing and reintegration of injured victims as expeditiously as possible.

The $15,000 bodily injury deductible provision will create specific complexities of its own. It will recreate the adversarial claim environment, establish the overlap of three very distinct systems, and the $15,000 deductible will soon become a floor figure for evaluating general damages.

For these reasons, Allstate clearly prefers to remain with a verbal type threshold such as currently exists under OMPP, with some framework enhancements where many agree they're required. If it is the will of this committee to proceed with some form of monetary deductible threshold, as proposed by Bill 164, we recommend as a minimum that serious consideration be given to providing some form of balance between a verbal threshold and a deductible, one that would serve to contain erosion and provide some degree of certainty and specificity.


We further recommend the addition of a business protection endorsement to be made available as an optional substitute or as a supplement to close the existing gap in the weekly disability benefit for self-employed persons.

Allstate recommends provision in legislation or regulation for false-claim sanctions against individual claimants and service providers, similar to those currently imposed against insurers.

We recommend a collaborative effort between government and industry to simplify documentation and processing for the betterment of consumers, health providers and insurers.

We recommend that government and the recently formed task force on rehabilitation and long-term care immediately investigate Michigan's current proposal for no-fault changes which will eliminate unlimited medical coverage because Michigan state drivers simply can no longer afford it, and we believe that legislation is going to be made effective May 1. The cost, by the way, for the unlimited medical coverage in Michigan is about $65 per vehicle. This will be the last jurisdiction in the United States to finally recall terms of unlimited medical provisions.

New Jersey removed this from its legislation in 1991 and Pennsylvania in 1984, because the drivers of those states could no longer afford it.

Because the income replacement features of Bill 164 contain significant potential cost and complexity implications, as we've tried to describe, we recommend that government at the very least establish an income replacement task force similar to that of the recently formed rehabilitation and long-term care task force to undertake more extensive study of all elements of these provisions.

It is Allstate's conviction that the potential impacts of the changes proposed in Bill 164 are too costly and too complex and will prove to be unaffordable and unacceptable to the drivers of Ontario. We respectfully suggest that Bill 164 be abandoned.

Thank you for allowing us to meet with you and present our concerns. We'll be happy to answer any questions you might have.

Mr Mancini: Mr Kelaher, thank you for a very good brief. I've had a chance to look at the charts you have provided us with this morning. I had a chance briefly before you started to look at the more detailed summary you've also provided for us.

Basically, what you've said this morning is what a large number of other individuals, organizations and others have said before this committee, that this bill is very complex. I've been waving around these 68 pages for the better part of two weeks and I've asked many experienced people like yourself whether you believe this complexity is necessary. You've said in your brief it is not. Do you have any other advice for the government in regard to the complexity of these 68 pages which even experienced litigation lawyers, people in the insurance industry for decades, have said they cannot understand? Do you have any other advice for the government on these 68 pages?

Mr Kelaher: Mr Mancini, I'd like to ask our Mr Bowles to respond to that, since that's his area of expertise.

Mr James K. Bowles: The language of the legislation can be looked at. We still believe it's going to be awfully difficult for people who are not trained legal people to find their way through it. We believe the linkages between the various kinds of coverages are extremely difficult to try and follow. We would like to see that piece clarified as well. I guess, thinking back to the experience of bringing in Bill 68 -- and that was enough of an experience, an extremely complex one -- seeing where this one would take us in terms of the commitment to education and training and the importing of resources from outside, it's going to be a very long and involved process.

Mr Mancini: I've called it a consumer's nightmare. Might you agree with my terminology?

Mr Bowles: Oh, indeed, sir. It's also a professional's nightmare.

Mr Mancini: I have also made the case during the last two weeks of these hearings, and so have a vast number of other people, that this bill is going to be very difficult for senior citizens to swallow. We had a brief from the Ontario Coalition of Senior Citizens' Organizations, an organization that has 300,000 members, and it's quite upset that the government wants to eliminate the age factor in the setting of rates. If the government proceeds with that, do you have any idea how high senior citizens' insurance rates will go?

Mr Kelaher: We had some experience with Bill 2, which was introduced by the Liberal government, and the hearings that surrounded the suggested introduction of Bill 2. We had a particular interest in the provision as it dealt with the uniformity of classification, and of course the removal of age and sex as it affected seniors, because Allstate in Ontario and certainly across other provinces in Canada has, for lack of a better word, targeted that group as being one of its primary customers. We have a very large percentage of our existing customers in force coming from the senior population.

We did a dislocation study, which we introduced to the Ontario Automobile Insurance Board at the time, which indicated that the average dislocation, if I recall, François, might have been in the 45% to 50% range.

Mr François Boulanger: Yes, that's about it.

Mr Kelaher: It ranges upward, depending on where they were located and so on. It was a very serious impact.

Mr Phillips: I remember.

Mr Mancini: Yes, we remember. It's going to be interesting for government members to explain to senior citizens why they should be paying another 45% for their automobile insurance rates. I'm looking forward to how this explanation is going to be made.

I should also let you know that the opposition members have for some time given the government the green light to proceed on the road safety program. As you know, they've introduced the bill. It's sitting on a shelf somewhere in some minister's office. We don't know what ministers are responsible for what these days; they haven't quite sorted that out yet. It's sitting somewhere in some government department. I want the industry and the individuals who've been following these hearings to know that both opposition parties quite some time ago gave the government the green light to proceed with the Ontario road safety program, something which you mention in your brief, something which will in fact help control the cost of insurance rates.

Mr Harnick: Mr Kelaher, you talked about your objections to taking the cap off medical expenses, and you used Michigan and New Jersey by way of comparison, but you'd agree with me that neither Michigan nor New Jersey has any kind of plan remotely resembling OHIP.

Mr Kelaher: No, but the excess level that is contemplated, certainly in Michigan, is in excess of $250,000 of medical costs. I think it's a fairly safe presumption that this would eat up the bulk of the base that OHIP might provide in a similar injury situation.

Mr Harnick: We know just from experience that there are not too many cases where a $500,000 cap, or even if you capped it at $1 million, is not suitable.

Mr Kelaher: I don't know, based on our claims experience. It's fairly new to us at this stage. Jim, after the period of time that OMPP has been in, what has been our experience?

Mr Bowles: We are starting to bump our heads on the upper levels of it, but in all honesty, we haven't seen where it has been a problem to provide adequate treatment for people over the long term.

Mr Boulanger: If I might add, based on the actuarial studies that have been prepared for the costing of Bill 164, all of the actuarial firms have provided estimates of between 200 and 350 claimants per year in Ontario. The lowest one, coming from Mercer, was at 150. So there is a fair number there.

Mr Harnick: I want to deal with your graph on page 9 of the black booklet. If we take a look at what you're projecting for 1994, for instance, you've got a combined loss ratio under the OMPP of 115.4. Just so I understand this, if we add the 8% that you're going to need anyway, and we add roughly another 20%, your loss ratio under Bill 164 comes to 143%. Am I right about that?

Mr Kelaher: I don't think so, but François may be able to take you through --


Mr Harnick: Am I reading that correctly?

Mr Kelaher: No.

Mr Boulanger: The impact of the rate increase is not included in there.

Mr Harnick: That's right, so you've got to add those in.

Mr Boulanger: Well, if we were taking the rate reduction, the 115% would drop. But you were right in adding the impact of Bill 164 in there. So if we were to add 164 into, I guess, the year 1994, if you expect the impact to be, let's say 15%, we would be looking at something in the neighbourhood of 135%, which is bad enough.

Mr Harnick: You said it would be 20% to 25%, in your brief.

Mr Kelaher: That included the 8% deficiency that we currently have.

Mr Harnick: So you're upward of 135%. It strikes me that almost puts you into the range of when we had a pure tort system.

Mr Kelaher: It gets close.

Mr Harnick: That's even before you take into account tort reform, which would have probably brought the number down very close to what you're ultimately going to be, correct?

Mr Kelaher: Possibly so.

Mr Harnick: You recall what Justice Osborne said. He said originally that a threshold no-fault system in the long run isn't going to provide any savings to the insurance industry.

Mr Kelaher: I don't think that can be accurately described. I think the key thing is that we haven't been able to watch how the tort environment might have continued to roll out. We don't know that. We do know the current system over the last two and a half years. You have to remember that the 8% increase we will be filing for is the first increase in premiums that we've filed for since the implementation of OMPP, and during the last two and a half years we've in fact reduced the cost to the consumer by 8.5%. So I would say that pretty well equals it out. We reduced cost by 8.5% over two and a half years, and we're now asking for an 8% increase.

Mr Harnick: You see, it just strikes me that these --

The Acting Chair: Thank you very much. Proceed, Mr Klopp.

Mr Paul Klopp (Huron): Good morning.

Mr Kelaher: Good morning.

Mr Klopp: These numbers always intrigue me too. You mentioned on page 3 in your brief suggestions to improve the present system, and yet we talked a little bit earlier, just following up, that you need about 8% increase now under the system.

Mr Kelaher: Yes.

Mr Klopp: Yet on page 3 you talk about increasing benefits, which obviously are a little less, I think, than what we're talking about in our Bill 164, but are on the same lines. You must have an actuarial study to show that these don't cost anything, and yet we're talking about an 8% increase with no benefits, and if we follow through with ours, it's like 15% or 18%. Could you explain that to me better?

Mr Kelaher: Sure. The proposal we're making is that these changes we're suggesting are fairly simple. Our proposal is that in our particular case where we require an 8% premium increase this year, we don't believe that anything should be introduced to the consumer that costs anything more than that. However, if for example, some of the provisions of Bill 164 could reduce the costs of the existing system, they may offset some of these other provisions. You could take away from the existing system, if you felt it was important to have indexation, if you felt it was important to have other provisions that we are recommending.

Our strongest message to you is don't do anything that is going to add additional cost to the system at this point in time. Our consumers aren't going to put up with it, and they tend to come at us, and not at you, when we introduce premium increase, and therefore we're very concerned about it. There is not enough room in the system for extra costs or extra benefits, regardless of how good they might be.

Mr Klopp: But without changing anything -- just to be clear in my mind for when I get a phone call or not from my insurance agent --

Mr Tilson: You will.

Mr Klopp: -- because I have insurance too.

Mr Tilson: Guaranteed you will.

Mr Klopp: You're asking for an 8% increase this year without any changes, without any increase in benefits or decrease in benefits?

Mr Kelaher: That is correct. We will be filing for an average 8% increase this year, that's correct.

Mr Klopp: Will people not phone your office and complain?

Mr Kelaher: Absolutely, and we will be writing to each of our customers in an attempt to explain why we are doing it, but we will continue to get phone calls; of course we will.

Mr Klopp: But yet on page 3, your recommendations -- I don't want to belabour this -- I'm just trying to get it clear in my mind -- if in a magical world you could put this in place, you wouldn't need any more rate increases?

Mr Kelaher: No. What I'm suggesting to you is that some of those recommendations would cost additional money, and I'm suggesting, don't put them into place while we require an 8% rate increase even to get even. If at some future point in time the level of rate increase required by us or the members of the insurance industry is considerably less than that, that's the time to start considering increasing benefits and certainly those that involve increased costs.

The Acting Chair: Thank you very much. I'd like to thank the Allstate Insurance Co for its presentation and each of you for expressing views on its behalf. Thank you very much for the time you've contributed to this committee.


The Acting Chair: The next presenter is Dr David Corey. Welcome. You have 20 minutes for your presentation. If you could leave some of that for questions and answers, the committee would appreciate it. You can go ahead, Dr Corey.

Dr David Corey: My background is in psychology and rehabilitation and I manage a number of clinics in Ontario that treat people who have chronic pain problems and soft tissue injury, emotional trauma and mild head injuries. I'm also on the accident benefits advisory committee to the Ontario Insurance Commission and I've recently been appointed to the task force on rehabilitation and long-term care. That's just to give you some sense of where I'm coming from.

I want to speak to you today exclusively on the issue of how I see Bill 164 impacting upon rehabilitation and the ability of injured automobile accident victims to recover in Ontario. I've had opportunities over the last 15 years of working with both the tort system pre-OMPP and with today's OMPP system, as well as working with Workers' Compensation Board cases and so on, so I have a sense of comparison.

Our experience has been that since the introduction of OMPP, rehabilitation and recovery have greatly improved. Approximately 50% of our clients prior to OMPP were successful in our programs and now it's about 75%. We attribute the difference to the absence of the adversarial process that is inherent in the tort system; it can introduce a lot of emotional complications and mixed motivation and even systemic delays.

This experience has been repeated in other jurisdictions in Canada, such as British Columbia where a tort system continues. In fact, one study that was recently published found that chronic pain was significantly more prevalent in those patients litigating in British Columbia.

What we have experienced is that, with OMPP, clients receive faster access to treatment, which was one of the goals of the policy, and more cooperation from their insurers and less interference from outside sources. I believe that if Bill 164 is passed, the reintroduction of a partial tort system will mean that more injured automobile victims will be going to lawyers and getting embroiled in the legal system. That, in my opinion, will serve to produce delayed and insufficient recovery in many of these individuals and consequently, I believe, produce higher claims costs, both for the rehab care and the claims themselves, and I believe will also produce higher premiums.

In my opinion then, Bill 164 is a step backwards. We should be looking instead at either modifying the present threshold -- it has some problems -- or even perhaps moving towards a pure no-fault system as alternatives.

Just as a wrapup, I also feel that some of the changes to the statutory accident benefits schedule are improvements. Others need to be thought through more carefully, but I believe that a lot of changes can be made to the current OMPP system to maximize recovery and reduce costs and not result in high increases in premiums, which I suspect would be involved with Bill 164.


The Acting Chair: Thank you very much. Questions? Mr Tilson.

Mr Tilson: Can you just clarify what your connection with the Ontario Insurance Commission is?

Dr Corey: There's an advisory committee called the accident benefits advisory committee, made up of individuals from rehabilitation, insurance, consumers association groups, advocacy groups, and it advises the insurance commission on issues related to accident benefits.

Mr Tilson: There's a fear that has been expressed throughout these proceedings that there will be an increased use of the commission, that there will be more matters brought to the commission, disputes with the insurance companies; the consumer feels that he is entitled to such and such benefits and the insurance company says no. Has the insurance commission privately or publicly dealt with that subject?

Dr Corey: There have been no studies or projections done, if that's what you mean. I believe they also feel that there will be increased usage of the insurance commission.

Mr Tilson: I guess that's what I'm getting at, that when you put a bill forward such as this -- it's going to be a major change. The insurance companies tell us the rates are going to go -- well, the last delegation said 25%, including the 8% increase that they're currently applying for. So there are going to be increased costs. I guess what I'm getting to is, has the insurance commission in any way advised the government as to how its role is going to change?

Dr Corey: I'm not privy enough to the workings of the insurance commission to answer that question.

Mr Tilson: Are you prepared to recommend to the commission that perhaps it put forward a recommendation to the government that this legislation be delayed until the commission has had an opportunity to forecast what this is going to cost the commission, what it's going to cost the taxpayer, what it's going to require for additional staff, what it's going to require for additional services that the insurance commission will be obliged to render as a result of increased activity with the insurance commission?

Dr Corey: I certainly believe the forecast is in order.

Mr Tilson: Would you be prepared to recommend to the commission that it make that formal request to the government?

Dr Corey: Yes, I would.

Mr Tilson: Yes. Can you, in your own experience with the insurance commission, give any of your own personal thoughts as to the increased activity of the insurance commission as a result of Bill 164?

Dr Corey: I haven't had enough day-to-day contact with the insurance commission to be able to answer that. I know that their rate of mediations and arbitrations is climbing, probably as the people of this province become more aware of its existence, and the climb, at this point, hasn't tapered off, so I don't know where all that will end.

Mr Tilson: One of the concerns that has been brought forward, particularly of people with long-term care, is that contrary to some of the remarks you have said, the legal profession will play a less active role in the whole process because of the increased emphasis on benefits and that the innocent accident victim will be left with either no representation or inadequate representation. Have you any thoughts on that fear that has been expressed?

Dr Corey: What I can tell you is that when OMPP came in, it quickly became known that if you had an accident, there was no point in going to a lawyer unless you were catastrophically injured. There's been a significant dropoff in the people we see coming to our clinic who have legal representation. In some instances, they probably could use some legal help, because they're into battles with their insurance carriers and they could use some assistance, and we always recommend to them that they get some legal help.

I believe with Bill 164, everyone who has an injury in an automobile accident will go to a lawyer. Of course, everyone will then have some legal representation. Whether it's inadequate or not, I can't speak to, but I believe that will inherently bring the adversarial process back into the recovery process, and the two are mutually incompatible. I think that's going to be a major drawback to Bill 164.

Mr Owens: I'm a little bit confused about whom you're representing here today. Are you representing the insurance commission today?

Dr Corey: No, I am not. I'm simply representing myself and my organization.

Mr Owens: I appreciate that. In terms of your experience, according to your one-pager you've been involved in the treatment and rehabilitation of accident victims since 1978, which would give you a good depth of experience to draw from. You mention a correlation -- I guess I'm putting your second and third bullet points together -- that early rehabilitation and your success rates have a direct link. I'm wondering if you've conducted an empirical study that you could share with us in terms of the number of patients you've looked at, the types of injuries that have been involved and the treatments.

Mr Tilson: Haven't you done this sort of study? Hasn't the government done this sort of study?

Mr Owens: My question is to the presenter, not to the third party.

Mr Tilson: I'm shocked that you're saying to us that you haven't done this sort of study yourself.

The Acting Chair: Mr Tilson, could you please control yourself to allow for logical questioning of witnesses. Thank you very much.

Mr Mancini: Very logical, yes, Mr Chair.

The Acting Chair: Mr Owens, proceed.

Mr Owens: I'll wait for Dr Corey to answer my question.

Dr Corey: You're asking if we've done an empirical study?

Mr Owens: That's right, from your clinic's perspective.

Dr Corey: No. We have the data available. We are currently engaged in other studies at this point and we intend to do that study once we get the current studies out of the way.

Mr Owens: So it's your view that our Bill 164, which in fact does offer rapid and immediate access to rehabilitation, is a good thing and will heighten the level of return to productive life of accident victims.

Dr Corey: No. My view is the opposite of that. My view is that Bill 164 reintroduces the tort system to pretty well everybody who has an injury and that will impede recovery and rehabilitation.

Mr Owens: Then the provision of immediate and indexed benefits in your view is not a good thing to do.

Dr Corey: We have immediate benefits today.

Mr Owens: In terms of indexation, do we have indexation today?

Dr Corey: No, but from an immediate point of view, that's hardly a problem.

Mr Owens: Do you think under OMPP, looking at a tort system that allows people to play in a wild west scenario in terms of the --

Dr Corey: I'm sorry, in terms of what?

Mr Owens: In terms of the court process, where some people won big settlements but other people didn't. For instance, if a person skids on black ice and ends up in your clinic, there's no one there to sue. How do you see that as being a benefit to accident victims in terms of your representation that Bill 164 --

Dr Corey: I'm not suggesting a return to a tort system.


Mr Owens: In terms then of the coverage of psychological injury under our legislation, do you view that as a good and progressive step?

Dr Corey: The single biggest objection I have to the current threshold is that I believe it discriminates against those with psychological, emotional injuries that are both serious and permanent. My recommendation, from a purely rehabilitation point of view, would be to fix the threshold or, if that isn't feasible, move to a pure no-fault system. I don't think that tort, in my experience, is a good way of helping people recover what they lost when they have an injury.

The goal of rehabilitation is to return people back as much as is feasible to the place they were prior to that injury. That's also the purpose of tort, but tort does it through money and does it in an adversarial, oppositional process. Rehabilitation does it through a health care, human welfare process and I believe the two do not work together very well. That's my experience.

Mr Mancini: Dr Corey, you've done a good job this morning explaining some of the problems being created by Bill 164. Some of the things you've mentioned to the committee this morning have in fact been mentioned over the last couple of weeks of our public hearings. The problem is that these people won't listen and when they're given evidence, they don't believe it. You've stated very clearly in your presentation that the Ontario motorist protection plan has in fact worked and worked well.

You were challenged on that assumption by the parliamentary assistant who asked you whether you had done an empirical study, whatever that means. Mr Tilson properly asked the parliamentary assistant where the government study was. Where was its study? I guess evidently they've done no study. The entire process of Bill 164 has nothing to do with facts, studies or whether or not OMPP is working. It's just nothing short of a political process --

Mr Tilson: It's the wild, wild west.

Mr Mancini: It's wild, wild west game right here.

I want to ask whether you have had contact with other similar professionals and organizations like the health recovery group and whether they've informed you that the success rates in their clinics and in their private practices have in fact mirrored your success rates?

Dr Corey: Yes, in fact we have an association, and our president will be presenting to the committee this afternoon and will expand upon that issue, I believe.

Mr Mancini: So the truth of the matter is, if the government wanted to know whether OMPP was working, as far as giving people immediate benefits, immediate opportunities for rehabilitation, all they had to do was to contact people like yourself. Evidently you're well known. You helped the Ontario Insurance Commission. They found you in order to seek your advice as to how the commission works. All they had to do was to have one of their many people in different departments give you a call to find out what was going on. It would have been that simple. Is that not correct?

Dr Corey: I assume so.

Mr Mancini: There was also a question in regard to the workings of the insurance commission and how this bill would impact the insurance commission. I believe the reason the question was answered -- and you should know this so that possibly when you attend further meetings, you might have this as a part of your discussion -- it's been mentioned that the insurance commission has asked the minister for 100 more staff people and $5 million or $6 million more to work around and with Bill 164.

It's going to be a busy place down there and they may even have to take over the boardroom for lack of space. I was wondering if you would agree with me that it is not a very good expenditure of funds. The government's broke, it's quite evident. Do you think we should be changing the system so we can add 100 civil servants and another $600 million of overhead at the Ontario Insurance Commission? Do you think that's money well spent, Dr Corey?

Dr Corey: As I've said, I think the present system has many positive features and anything that increases costs without increasing benefits I think is a mistake. When I say "without increasing benefits" it doesn't really improve the system substantially.

Mr Mancini: Do I have some time left?

The Acting Chair: You certainly do. You've got a minute and a half, Mr Mancini.

Mr Mancini: I don't have any further questions. Thank you, Dr Corey. It was a good brief.

The Acting Chair: Thank you very much for your presentation, Dr Corey. We appreciate the time you took to come forward this morning before the committee and express your views. Thank you very much.

Mr Tilson: Are you ready now? Can we talk about room 151? On a point of order, Mr Chairman.

The Acting Chair: On your point.

Mr Tilson: Mr Chairman, I'm a member of the subcommittee, as are Mr Mancini and Mr Owens. All three of us were present with the Chairman of this committee, Mr Hansen, and the clerk, and my recollection of a meeting we held several weeks ago is that the proceedings today would be conducted in room 151. My question to you and/or the clerk is why we're here as opposed to that room.

The Acting Chair: Mr Mancini, is your point on the same issue?

Mr Mancini: Yes. My point of order is the same as Mr Tilson's point. We were promised room 151 whenever it was available. The room has been empty all morning. We've had expert witnesses from the insurance industry, from the rehabilitation field, from the Ontario Head Injury Association. We've had opportunities to help educate the public. We know tens of thousands of people watch those proceedings, and I'm very annoyed that we're not in room 151 this morning. Mr Tilson made a good point this morning. His point was in order earlier on, and we should have moved at that time from this room to room 151.

Mr Klopp: Anything to waste time.

Mr Tilson: We're not wasting time at all. We want to be heard.

Mr Mancini: It's not a waste of time. You're just trying to put a blanket on everything. That's your problem. You just want to cover it all up.

Mr Tilson: Mr Chairman, notwithstanding you're now going around the room, my question is to you or the clerk or whoever convened the meeting in this room as to why we're not in room 151 as agreed.

Mr Mancini: Who broke the agreement? That's what we want to know.

Mr Owens: There was no agreement, for God's sake. Just like everything else.

The Acting Chair: If the committee members will come to order, I think we may be able to work through this in some sensible fashion. If you do not wish to come to order, we can just sit here and listen to the bantering for hours, if you like. I think there was an agreement made.

Mr Mancini: Get off your high horse, Mr Chairman.

The Acting Chair: I will refer to the clerk, who will give us an indication of what that agreement was regarding the subcommittee meetings in terms of hearing locations.

Clerk Pro Tem (Mr Franco Carrozza): I have before me the notes I took during the meeting. If it's okay, with your agreement, Mr Tilson and Mr Mancini, I will read the notes as they were taken.

The subcommittee met on January 26. That was a Tuesday. Present were Mr Owens, Mr Mancini, Mr Tilson and Mr Hansen. There were six discussions and six agreements:

(1) The subcommittee agreed to schedule Mr Swart at 2:30 pm on Wednesday, January 27; (2) agreed to move to room 151 -- there was a vote, two to one in favour -- Wednesday, January 27 and 28; (3) agreed to move two scheduling problems, for Chedoke-McMaster and the firefighters, to February 9; (4) agreed to replace the cancelled Tuesday to Wednesday, February 9. There were two rescheduling difficulties, which were the Ontario risk association and the Canadian association of rehabilitation centres, which were rescheduled for 11 and 4 respectively; (5) agreed to inform Mr Peter Kormos of the acceptance of the agreement to move into room 151; (6) agreed to insert cancellation, Windsor and District Labour Council, for 11:30 am February 2 in Windsor.

Those are the six items that were discussed and I took notes on.

Mr Tilson: Mr Chairman, I'm not going to challenge the clerk. I will say that there's no question from my perspective as a member of that committee that if that room was available, we would be meeting in that room. It was felt in fact that because of the interest in this committee, the workings of this committee, the topic of this committee, specifically auto insurance, it was most important that the television facilities be used.

I'm not going to get into the fact as to what the clerk says is one thing and what the rest of the subcommittee members say is another. Mr Mancini may have some thoughts on that. My question is, we are now at roughly 12:30 and there's no reason why we can't meet in room 151. I would assume the rest of the committee would have no objection to that.

Mr Mancini: Let's be very clear: There were a lot of decisions made by the subcommittee that are not part of that six-point list. The clerk's six-point list is accurate as far as it goes. We were called on the telephone frequently, both myself and Mr Tilson, at all hours of the day and night, during weekends and other times, to make decisions which are not part of the six-point list. We had numerous ancillary discussions in regard to room 151.

It had been our position from day one that this committee deserved and needed to be in room 151 for the entire proceedings. We missed our first day for some reasons that I don't want to have to repeat at this time. We got day two and day three in there -- I guess it was a Wednesday and a Thursday -- and it was common knowledge within the subcommittee that if room 151 was available, we would be there.

It does not serve the public interest at all to have this committee here in room 1 when the government has spent millions of dollars equipping room 151 with public televisions so that the public of this province can watch the proceedings of the Legislature and its committees.

I'd like to support the proposition made by Mr Tilson that we move this afternoon's hearings to room 151 because it's available and because the proceedings before this committee are of urgent public importance.

The Acting Chair: Thank you very much, gentlemen. I listened very carefully to what you've had to say and the facts are, as I know them to be, that the movement of this committee into room 151 on Wednesday 27 January and Thursday 28 January was agreed to. There were also some agreements around replacement of cancelled groups and there was also an agreement to meet Tuesday 9 February to make up for the lost day due to the passing of Ms Ward.

Committee room 1 is the normal room for this committee, and the notice of room location went out last Thursday.

Mr Tilson: Mr Chairman, you're not a judge. You're a Chairman of this committee. You can't unilaterally make decisions like that.

The Acting Chair: There were no objections raised when the notice of committee location went out last Thursday.

Mr Tilson: You are out of order.

The Acting Chair: Therefore I am bound to abide by what the subcommittee agreed to. We are in recess until 2 pm.

The committee recessed at 1232.


The committee resumed at 1402.

The Chair (Mr Ron Hansen): It being 2 o'clock, the standing committee on finance and economic affairs continues with Bill 164, An Act to amend the Insurance Act and certain other Acts in respect of Automobile Insurance and other Insurance Matters.

The first group forward is the Canadian Bar Association. I'd like to welcome you to the standing committee on finance and economics. Would you please identify yourselves for the purposes of Hansard.

Mr Tilson: On a point of order, Mr Chairman.

The Chair: Yes.

Mr Tilson: During the lunch break I received a notice from the Legislative Assembly committees branch indicating that this meeting this afternoon would be conducted in room 151. Since that notice did come and has been sent out to various individuals, I'm wondering if, before we proceed, perhaps we should adjourn to that committee room.

Mr Mancini: We tried to have this discussion this morning, but the Chair at the time did not follow the standing orders, refused to allow members to properly participate as the standing orders allow, took great authority on himself that he did not have and thoroughly contravened innumerable points in the standing orders.

I was shown this today by Mr Tilson. It's the point that we tried to make all morning over the unfair objections of the Chair, and it states very clearly where we are to be. Frankly, Mr Chairman, we are getting fed up with the government trying to hide these hearings. You know yourself all of the difficulties we had in getting two lousy days in room 151 for a piece of legislation that is going to in fact change the way insurance affects millions of Ontario drivers and consumers.

Mr Tilson and I tried to get this committee transferred to room 151. We went through some elaborate procedure that the Chair thought we should go through to come to a point he wanted us to get to, which meant we couldn't go to room 151. We have a document here that says, "Sent by the Legislative Assembly committees branch," which indicates that we should be in room 151. Why are we not there? The room is available. We're not asking anyone to leave.

The Chair: I think it's very important that the people of Ontario witness the presenters that come forward before this committee. I say we recess to room 151.

The committee recessed at 1405 and resumed at 1417 in room 151.

The Chair: I've got before me, and I'll give it to the clerk -- it was unknown to me that we would be in room 151 at 2 pm. I'd like to file that. It comes from the clerk's office. Mr Franco, can you --

Clerk Pro Tem: It's Carrozza, Mr Chairman.

Mr Owens: On a point of order, Mr Chairman.

The Chair: Yes.

Mr Owens: I think we should apologize to the witnesses as well.

The Chair: Can you explain that coming out from your branch?

Clerk Pro Tem: No, I cannot. I have no idea why this went out to the members. It was not on my instruction. I will find out for the members.

The Chair: Okay. Thank you.


The Chair: The first group coming forward is the Canadian Bar Association. If you wouldn't mind identifying yourselves for the purposes of Hansard. We have one half-hour; we have until 10 minutes to 3.

Ms Erica James: Thank you. My name is Erica James. I'm president of the Canadian Bar Association -- Ontario, and I have with me Ian Kirby, who is chair of our no-fault insurance committee, and Tim Bates, who is the former chair of that committee and a member of our executive.

We're making this submission on behalf of the Canadian Bar Association and thank you for the opportunity that you've made available to us. For nearly 80 years the Canadian Bar Association has been the voice of the legal profession in Canada, and the Ontario branch represents about 16,000 members -- lawyers, judges and law students from around the province.

The objectives of the Canadian Bar Association include the promotion of improvements in the law, legal research, law reform and improvement of public and social policy. In pursuance of these objectives, our association examines the current issues, including proposed legislation and its effect on legal systems and the public. Our association achieves its goals through the extraordinary and very generous input of the volunteer efforts of our members, and we take pride in the representative input, the thoughtful analysis and the internal challenges that are given to every submission that we put forward.

I'm going to turn it over to Tim Bates to introduce our submission.

Mr Tim Bates: I thank you for the opportunity for the Canadian Bar Association -- Ontario to address a committee of this Legislature to once again join the public debate on auto insurance reform.

We've been involved with this issue dating back to the days of the Slater task force and I can tell you, Mr Chairman, members, that we at the CBAO have always attempted to be constructive and a resource to members of the Legislature of any political party on this issue and we're here today in that spirit: to be constructive and to provide assistance.

You have our brief, I gather. It had been distributed earlier. By way of introduction to the brief, let me just make three points. The OMPP legislation, in our view, is inequitable and inappropriate legislation for the people of this province. Our views on that legislation are well known through our submissions earlier, as recounted in the brief and our appearances before a legislative committee earlier.

To the extent that Bill 164 attempts to remedy the inequities of the OMPP, we welcome some of those changes; in particular, the partial restoration of the right to bring action in the courts for compensation as a result of a motor vehicle accident. We also welcome the enrichment of accident benefits.

But Bill 164, notwithstanding the improvements which we appreciate, has significant shortcomings, and they are the monetary level of the deductible and, most importantly, the lack of provision for indemnity on recovery of economic loss in excess of no-fault benefits.

I ask my colleague Ian Kirby, who is the present chair of this committee and who's had extensive dealings with this legislation, to elaborate on these issues and provide the committee with our suggestions for improvement of Bill 164 in the interests of the people of this province.

Mr Ian Kirby: Because of the constraints of time, ladies and gentlemen, I really do want to only focus on what we perceive are the two major shortcomings of Bill 164. The first, as Tim has mentioned, is the level of the deductible, which Bill 164 proposes at $15,000.

In our written submission, which you have before you, we have attempted to point out a number of examples from real cases of what amount of damages our courts award for pain and suffering in this province. There is a popular misconception that we live in something akin to L.A. Law land where our courts award hundreds of thousands of dollars for whiplash injuries and things of that type. Nothing could be further from the truth.

If you look at some of those practical examples -- and I'd like to deal specifically just with one. It's an example which appears on page 4 of our submission. It's a case involving a Mr Meyer. That name may be familiar to you. Mr Meyer and his wife were the first plaintiffs who had a decision under the OMPP legislation. It came down last year.

Mr Meyer was at the time a 68-year-old man who sustained a fracture of his kneecap and was required to undergo three operations under general anaesthetic. It was decided by the court that he would be faced with permanent disability and permanent difficulties with his leg because of that injury. In that case, the court decided this man's pain and suffering was worth $20,000.

Now, under Bill 164, Mr Meyer would receive $20,000 and would have deducted from that $15,000, theoretically leaving him with a net judgement of only $5,000. But would he actually recover anything?

You may or may not be aware that when individuals are involved in accidents it is not set in stone from the outset the amount of money that they will receive for pain and suffering. They go to see a lawyer or they act on their own and an opinion is usually given to them based upon expertise about what an injury is worth. The best the lawyer can do -- because it is not a fine science; it is an art, of a sort -- is give a range. In this particular case, I suspect a lawyer would have said the kind of injury Mr Meyer had would fall somewhere in the range between $15,000 and $25,000.

Upon being given that advice and being told that whatever Mr Meyer did recover would be subject to a $15,000 deductible, Mr Meyer would quickly come to understand that he could have a very valid case but because of the $15,000 deductible which you propose, he could wind up with nothing or next to nothing, and in all probability he wouldn't bother to make the claim, which is not to suggest for a moment that he does not have a perfectly legitimate and very serious injury, but it is one which, under the legislation as it currently stands, would not be brought forward.

The other thing to remember about the legislation as it currently stands is that the deductible of $15,000 which you propose to enact is to be applied after apportionment of liability. Now for those of you who have never been involved in a civil lawsuit, and hopefully that is most of you, essentially in a civil lawsuit there are two issues, and I describe them as the who-done-it issue and the how-much.

Let's use another example from here. We have a situation -- example 4 on page 5 of the submission -- Mr Smith, who sustained in that particular case a very serious and permanent injury, and in that situation the court awarded $35,000. That's the how-much issue.

But let's say that case also involved Mr Smith driving down a road and he's involved in an accident with another motorist, a very common situation where both motorists attempt to change lanes into the same lane at the same time and the sides of their vehicles come into impact. It would not be an uncommon result there for a court to say that in that case each motorist was 50% responsible. In that situation, Mr Smith would receive his $35,000, less 50% apportionment in responsibility -- the who-done-it issue -- leaving him with $17,500. But under your proposal of legislation, from his net of $17,500 you would deduct a further $15,000, leaving him with only $2,500 on an injury claim which the courts recognize was worth $35,000.

All that we ask you to do, ladies and gentlemen, before you set your minds on $15,000, is decide: Is it really this kind of injury which you wanted to exclude when you came up with the figure? It's our submission to you that if you do feel that there's a compelling economic need to impose a deductible on innocent accident victims, it ought to be as low as possible, and we are suggesting that it ought to be $7,500.

The second shortcoming is the elimination of the right to claim for full economic loss or, to use plain and simple language, people's wages. You're taking away the right of innocent accident victims to claim their full wages.

Again, in our written submission we have attempted to set out for you examples of those who would suffer the most under what you have proposed. Interestingly enough, it is not the rich and the advantaged in this province who will suffer the most; it is those who are economically most vulnerable. It is children, students, the elderly, women and men who have left the workforce to raise children, the unemployed -- and there are lots of those in this province at this time -- and, perhaps most of all, dependants of people who are killed in car accidents.

What you have proposed essentially means that in a situation where you have a single breadwinner in a family, if that breadwinner is killed, what you are telling the surviving spouse is that she or he, inside of roughly two and a half or three years, must either go out and get a job that pays the same as the dead spouse or find another breadwinner. Is that really what you intended by this legislation?

What you have also done is supplant existing rights for those most grievously injured, because for all of its failings, OMPP does at least take care of those most catastrophically injured. You have changed that and replaced it with a set of no-fault benefits but excluded the right of individuals to claim more where their particular circumstances dictate, and you have attempted to do that by a no-fault schedule.


By definition, the single greatest flaw of any no-fault schedule -- it is not the fault of your particular scheme; it is the fault of every no-fault scheme -- is that economic claims are limited to a no-fault schedule and by definition cannot adjust to individual circumstances. They can't take account of people's ability to rise above existing economic circumstances, which your legislation will not permit.

It will say that anybody who is involved in an accident must necessarily be confined to whatever level of economic circumstances they found themselves in when the accident took place. In other words, if you happened to be unemployed for a lengthy period of time when you were involved in an accident, the legislation deems that you would always be thus. If you happened to be a student, you are forced to live as a student would have lived for the rest of your life.

It is because of this that we say to you that if you are intent on limiting the right of individuals to the no-fault benefits on a mandatory basis, at the very least you must compel insurers to provide as optional coverage the right of individuals to make a claim against their own insurers on a tort basis, to purchase additional coverage where their particular circumstances dictate. We say tort coverage, because for all of its failings, tort at the very least allows people's individual economic circumstances to be taken into account. No-fault benefits cannot do that.

Finally, I'd like to deal with what I believe is a very popular misconception, that is, that lawyers are necessarily evil creatures and ought to be kept out of the system at all costs. Indeed, I now understand there is a desire or a move afoot to replace lawyers in the system on behalf of insured individuals and victims of accidents with a system of an advisory office akin to the one that currently exists in the workers' compensation system.

Aside from the fact that by all accounts the advisory system in the workers' compensation system does not work, what you are saying is that there is no way you can preclude insurance companies from continuing to employ lawyers to act on their behalf in representing their interests -- there's no reason you should do that -- but accident victims will not be allowed access to lawyers of their own choosing and must necessarily employ essentially a public defender system, operated, I expect, by lay individuals.

Whatever bad things we may think or say about lawyers, why do people employ lawyers in the first place? They employ lawyers because, for whatever reason, they don't think they are able to deal with a situation on their own. They require some expert advice. When they go to meet with or deal with an insurance company and its sophisticated claims individuals, they require someone representing their interests, an opportunity to deal with that insurer on an even playing field. You cannot take away that right, ladies and gentlemen.

The Chair: Mr Mancini, five minutes.

Mr Mancini: While not in complete agreement with your brief, I am none the less impressed with your brief, and I want to make the point early on that there is a legitimate place for citizens of this province to seek legal advice and retain the services of solicitors. I think you are more harsh on yourself than possibly others are.

Mr Kirby: Force of habit, sir.

Mr Mancini: Possibly. Would you agree with me that Bill 164, which exchanges the right to sue for economic loss that is enshrined in the current legislation for the right to sue for pain and suffering with the $15,000 deductible, is not a good tradeoff for Ontario's driving public?

Mr Kirby: I wouldn't agree with your premise that OMPP, the existing legislation, protects everyone's right to economic loss recovery. So I can't agree with your principle and accordingly I can't answer the question as you posed it.

Mr Mancini: How could I pose it for you to be able to answer it then?

Mr Kirby: I think if you posed the question, do I agree with any scheme of accident compensation where full economic loss is not allowed for, I would have to say no. I oppose OMPP because it has that shortcoming and I oppose Bill 164 because as it currently exists it has that shortcoming. I believe it can be corrected to provide for that. At least in part, one of the ways to do that is at the very least to allow for an amendment to subsection 224(6) of the Insurance Act, RSO 1990.

Mr Mancini: Thank you. I appreciate your giving me that information.

Do you believe in any type of no-fault insurance or would you favour strictly a tort system, something like the one that existed prior to the Ontario motorist protection plan?

Mr Kirby: The Canadian Bar Association has long been on record as supporting a hybrid tort/no-fault system. We have been on record for as long as the issue has been around as having said the old no-fault portion of the policy had inadequacies, as did the old tort system, and we have long advocated amendments to both. We have never been married to strict tort --

Mr Mancini: So you're on record then as saying that something had to be changed in regard to the way the insurance system worked prior to the implementation of the Ontario motorist protection plan. What was in fact happening prior to that was not, in your view, the best system we could have; let me put it that way.

Mr Kirby: I think you will find if you check the records that we were one of the major authors of what has become known as the tort reform package, yes.

Mr Mancini: And in that tort reform package, is there any room there for a blended tort/no-fault system?

Mr Kirby: Yes.

Mr Mancini: Fine. Since you're unhappy with the Ontario motorist protection plan -- and there have been numerous witnesses, I should let you know, who have come before the committee who've suggested to the government not to throw out the Ontario motorist protection plan but to try to amend it to see if it can be made to work better, if that's the government's wish. I don't think they've been listening, but I want to know specifically from you, if you were to make two or three substantial amendments to the Ontario motorist protection plan, having in regard what those amendments would do to automobile insurance rates which consumers would have to buy and pay for, what might they be?

Mr Kirby: I would alter the threshold definition as contained in what used to be section 231, and I don't know the section number under the revised regs, to modify it. I would also restore the right to claim on a tort basis, at the very least. Bearing in mind that I agree with you that affordability is one of the criteria, I would restore the right to claim for full economic loss on a tort basis for all individuals under OMPP.

Mr Mancini: Do you have any idea what those reforms might cost, since these hearings have in fact dwelt a great deal on cost, because we've come to find out through the many submissions that we've received that automobile insurance rates may go up $200 per household. Senior citizens may face insurance rate increases of up to 45%. Working women, who traditionally, because of some inequities in our society, have earned less than men, may have their automobile insurance rates go up also.

The Chair: About 30 seconds left, Mr Mancini.

Mr Mancini: Thank you, Mr Chair. Do you think there's a limit there? Everybody wants the best benefits they can buy of course, but they have to be able to afford it. Do you think there's a limit to the amount of changes that can be made to the OMPP and have that balanced off by affordable rate hikes if in fact that is the case, if in fact any rate hikes are affordable?

Mr Kirby: I say two things, sir. One is perhaps calling upon old history, but when your party formed the government, we asked the then government to advise us what it would cost to make certain amendments to OMPP and it was never forthcoming with the answer.

In terms of $200 or whatever the figure may be, it is my suggestion to you, sir, that so many people are excluded from any real benefit under OMPP that to say it would cost $200 more so that most people could make a claim, I suppose that's the point. Are you prepared to live with paying $600 a year and getting virtually nothing in return, or do you want to pay $800 and get some real insurance coverage?


Mr Tilson: I appreciate and agree with all of your comments with respect to economic loss and how the future loss of earnings simply won't be there to the self-employed, the man or woman who's gone away to raise a family, the highly qualified person who is trained but is in between jobs, infants, children, students and so on. There's a long list of individuals who simply --

Mr Harnick: Fatals.

Mr Tilson: Mr Harnick has indicated fatals, and it goes on and on.

You're right. That's one of the major issues of this legislation. I'm quite clear as to where I stand, and certainly the Progressive Conservative Party is quite clear as to where it stands on the issue of economic loss. There's one area that I'd like you to comment on, and that is your comments with respect to the whole principle of the deductible.

The deductible, whether it's $15,000 or $7,500, is a penalty. It's a penalty to the Meyers. It's a penalty to people like the Meyers. So whether you've got $7,500 or whether you've got $15,000, it's a penalty. To be quite frank, it's not just the Canadian Bar Association; the Advocates' Society and other legal groups, you're all united on the theory that the deductible should be reduced to $7,500. I think the deductible principle should be canned, because I think it's unfair to the innocent accident victim.

Mr Kirby: I agree with you and I say this, to get it back to a point that Mr Mancini made. With the last government in power we suggested a package of tort reform which we said, on the financial information that we had and that others had, in and of itself, if it had been put in on a timely basis, would have generated the kind of savings in automobile insurance that consumers sought and rightly deserved.

What happened was that the tort reform package was put in, but it was put in at the same time as OMPP, the drastic taking away of rights of innocent accident victims. We never got a chance to see what effect the tort reform package would have had on keeping down the rates of auto insurance without the need for any deductible. I think that's still a viable option. So I don't disagree with you.

Mr Tilson: I would hope that you, as a lawyer, would be simply opposed to the deductible principle, that your comments -- and maybe that's what I'm asking for, some clarification -- that if you've got to live with Bill 164, you would prefer that the deductible be reduced from $15,000 to $7,500, as opposed to saying it's fairer at $7,500, because it's a penalty, no matter how you look at it.

Mr Kirby: I see that, but I go on to say -- and I don't know whether I'm speaking just on personal belief or on behalf of the Canadian Bar Association -- that there are really two big-ticket items as part of this insurance package: on the one hand, pain and suffering, and on the other hand, people's wages. Of paramount importance are people's wages. That is not a luxury item. You ought to pay people's wages, first and foremost.

Mr Tilson: I'd like to ask you a general question. I gather you're all --

The Chair: One minute.

Mr Tilson: One minute, thank you. I gather you're all motor vehicles. No? At least, hopefully, one of you is.

My question has to do with the quantum of damages for the subject of pain and suffering. Again, I'm getting to the issue of the deductible, as to whether you qualify for the deductible. In your experience, do you find that courts award a different quantum of damages for pain and suffering in, say, Toronto as opposed to Sudbury or Ottawa or other parts of this province?

Mr Kirby: There tend to be minor differences across the province. They are not all that major, but what the tort system does is it takes account of individuals. It says that, for instance, if I break my right hand, that's not nearly as important as if it happened to be the right hand of Oscar Peterson. He needs his hand to do his job. It's a vital part of his job. As long as I don't break my jaw, I can still do my job.

The Chair: I'm sorry. I'm going to go on to Mr Winninger.

Mr Winninger: I certainly won't cast any aspersions on lawyers, especially from where I'm sitting as a politician.

Mr Mike Cooper (Kitchener-Wilmot): Why not?

Mr Winninger: I've heard many of the arguments before, but I must commend you on your measured and reasonable approach today. I guess I have to ask you, since there's no magic, I think, in how premiums are calculated, if indeed your argument were entertained that we reduce the deductible to $7,500 -- and I note that in the past you were content with $10,000 and other people have asked for no deductible at all, like Mr Tilson -- what would you give up? We heard this morning from Allstate, I believe it was, that no matter what we do, it's applying for an 8% increase in premiums. Would you lower the weekly loss of earnings? Would you eliminate indexation? Would you put caps back on rehab? Would you cut back the definition of "injury" to physical as opposed to mental and psychological? Where would you cut back? People seem to like these benefits.

Mr Kirby: Assuming it can be demonstrated that there is a need to cut back, and I'm not so sure that is so, I think you have to ask yourself the question, is there any need to provide, on a no-fault basis, loss-of-income benefits above and beyond the average industrial wage in this province?

It's one thing to say all accident victims, regardless of tort determination or fault, should be entitled to a reasonable level of compensation during periods of disability, but why is it necessarily so that this level of compensation should be something above the average industrial wage? Why do you want to say that you should raise that to cover off, I think it's 94% or 95% of individuals' taxable income in the province on a no-fault basis? Why do you want to do that on the backs of innocent accident victims?

Mr Winninger: This is an argument that's been made, although we do have some knowledge that the tort system has its imperfections. Teno and Arnold is a case I've thrown out several times, where the four-and-a-half-year-old child, aside from all the future care and pain and suffering, was awarded $6,000 a year, which translates into 1992 dollars at $13,000 a year. Our plan would pay her more -- and we're in the area of economic loss -- than she got in the adjudication. In another case, the accident victim got nothing because the driver of the car pleaded insanity and didn't have the mental appreciation of a duty of care. It's not as though the tort system is the great saviour of the so-called innocent accident victim.

Mr Kirby: I'm the first to agree with you that there are a few examples. I don't agree with you on your interpretation of Teno and Arnold, but I'll leave that aside. I'm the first to agree that there were some problems with the tort system. We attempted to address those as part of the tort reform package. But I don't say that because there were those odd little cases that you attempt to ferret out and find as being wrong with the tort system, that is necessary justification for a system such as this, which deprives all individuals of full economic loss.

Mr Winninger: No, but there are many people in single-car accidents. It's hard to determine why a car went off the road. It could be mechanical failure, black ice or momentary inattention, so it's not a clearly at-fault driver. What do we do with these people? Do we turn our backs on them?

Mr Kirby: I'm not saying you should, but why in those rare instances should you provide a situation where they're going to recover on a no-fault basis more than the average industrial wage, and in exchange for that say to a greater number of individuals, "You can't recover your full economic loss or all of your pain and suffering even though you're an innocent accident victim, because we have to make sure that we protect those rare cases"? I just don't think that's a fair exchange.

Mr Winninger: I think I understand your argument. I want to use my remaining one minute to canvass something new touched on that we heard in other areas as well, that the coverage for excess economic loss should be something that's available to those people who wouldn't be fully compensated under the loss-of-earnings guidelines.

Mr Kirby: And who want to buy the coverage, yes.

Mr Winninger: I understand from the insurance industry representatives who were here that if there's a market for this, they'd certainly be happy to service the market. You say it should be mandatory. Why does it need to be mandatory?

Mr Kirby: No, it should be optional coverage but it should be made mandatory that the insurers make it available for purchase. It's quite simple to do. All you need to do are two things. If you look at subsections 224(6) and 224(7) of the Insurance Act, it currently reads, "An insurer, with the approval of the commissioner may offer optional benefits." You change "may" to "shall." In subsection (7) it says, "Optional benefits offered under subsection (6) shall be deemed to be no-fault benefits." You change that to "on a tort basis." The reason you make it tort is because tort can address individual financial circumstances in a way that no-fault benefit schedules cannot. That's not your government's fault. That's just the product of the way no-fault schedules work.

Secondly, by making it on a tort basis you make it more affordable. It means that innocent accident victims can purchase relatively inexpensive coverage, which is what this is all about.


Mr Winninger: Well, we can talk about that for endless time.

The Chair: I'm sorry; time has run out. I'd like to thank you for appearing before this committee.

Mr Winninger: Will you allow me to continue?

Mr Harnick: Why don't you just do it.

Mr Winninger: Are you allowing me to continue?

The Chair: No, I'm not. I'm sorry, but the time has run out. I'd like to thank you for appearing before this committee.

Ms James: Thank you.


The Chair: We have Professor Michael Trebilcock. I'd like to welcome you before the standing committee on finance and economic affairs. We have one half-hour. We have until 3:20, and in that period of time please leave some time at the end for the members of the committee to ask questions on your presentation. You may begin.

Dr Michael Trebilcock: Thank you very much, and thank you to the committee members for inviting me here today. I come here in my personal capacity as a professor of law and economics at the University of Toronto. I should add that ministry officials encouraged me to come, but I did so explicitly on the basis that I would offer my own assessment of the government's proposals.

My credentials in this area are as a coauthor of a recent book on regulating traffic safety; as a coauthor of a major study for the Alberta government on alternative order of compensation schemes; finally, as a coauthor of a major two-volume, two-year study on the efficacy of the tort system for the American Law Institute in Philadelphia, as part of its tort reform project.

The summary of my evidence that I have submitted to the committee is a verbatim reproduction of the conclusions to that two-volume study, and is not tailored to the exigencies of the present policy debate here in Ontario. We call that study, Exploring the Domain of Tort Law: Taking the Facts Seriously.

I've been concerned, as a participant in one capacity or another in these debates in this province over the last number of years over no-fault issues, that many of the debates reflect ideology, myth, fallacy or self-interest. There are some facts that frankly are now established beyond the range of contention, and these must inform any responsible resolution of these policy issues. This is not to say that in the end subjective value judgements can be avoided.

Let me move to Bill 164 itself. I believe the government is to be complimented generally for a number of the features of the reform proposals; specifically, the increase in the cap on income replacement benefits from some $600-odd a week to $1,000. Secondly, the indexing of economic benefits is absolutely crucial, and that is an immensely compelling feature of the bill. Thirdly, the more generous treatment of non-income earners, in particular, students and care givers is a strength of the bill, as is more generous treatment of the self-employed and more generous treatment of supplementary medical and rehabilitation costs, death benefits and funeral benefits.

In short, the bill compared to the existing regime provides more generous treatment of all forms of pecuniary costs, in particular -- I realize there are two aspects of these no-fault benefits that have provoked controversy. I think it is key that the bill provide a generous and indeed unlimited, but nevertheless verified, rehabilitation cost and that it provide generously for a long-term permanent disability, total or partial.

In a recent Rand study in the US, a massive empirical study of thousands of people injured in various settings, the major compensation gaps were found to be with respect to rehabilitation costs and loss of income associated with long-term disabilities, where only 20% of earnings were covered by any compensation system: tort, private or social insurance. So it's clear that the major compensation gaps relate to rehabilitation costs and income losses from long-term total and partial disabilities, and in this respect I think the reform proposals squarely address these deficiencies.

Having said that, let me move on to some reservations I have. Obviously, generous treatment of any kind of loss comes at a cost. I've listened to the CBA presentation and some of the interchanges with committee members. The tradeoffs here are quite simply stated, although not simply resolved. We can provide generous but limited no-fault benefits to all or most victims of auto accidents; that is, provide very broad victim coverage. Most victims are reasonably well compensated, although not fully compensated, so there's a tradeoff there. We're covering more victims, but not covering all of them as generously as the tort system presently covers a subset of them.

My own analysis of the data suggests that what this bill will do -- this is confirmed by the Mercer study -- is increase victim coverage from about 64% of traffic accident victims to 98%. That is a very substantial increase in the breadth of coverage. It comes at a cost, of course. Some subset of those would previously have had tort claims and would have recovered more. They will now be limited in various respects to the albeit generous but limited no-fault benefits. That is one tradeoff. There's no way of avoiding it.

The other tradeoff is between levels of benefits, breadth of victim coverage and premium costs. There is no free lunch in this game. I've heard arguments over the years that the ideal system would be a mixed system of generous no-fault benefits and the right to sue in every case. Of course, in a world where nobody had to pay the costs, that would obviously be the ideal system.

Mrs Caplan: That was Bob Rae's world in opposition.

The Chair: I'm sorry. Mr Winninger has the floor.

Dr Trebilcock: I'm not taking a partisan position on this. I'm simply saying that if one simply looks at the benefit side of the ledger, the most generous package is one that provides generous no-fault benefits to everybody injured in an accident and permits those who can identify a negligent driver to sue in tort law in every case. But empirical evidence again is absolutely crystal clear on this. Premiums would go through the roof, so there's no point -- unless one believes the cost of insurance doesn't matter to Ontario citizens -- in arguing for a gold-plated system that provides generous no-fault benefits and a right to sue in every case. It doesn't add up.

Tradeoffs have to be made: breadth of coverage, level of benefits, premium costs. I don't have any magic solution that tells you as representatives how to make those tradeoffs. All I'm asking you is not to pretend they can be avoided.

With the current proposed package, the Mercer study estimates relatively modest increases in premiums of 4%, although I understand this estimate is controversial. I'm not an actuary and I'm afraid I can't resolve that controversy for you, but I acknowledge it to be an important issue, and to the extent other credible estimates suggest higher premium increases, it's clear where you have to start modifying the system. You are going to have to either reduce some of the no-fault benefits or you're going to have to reduce the right to sue in those limited cases where it's still preserved.


Let me move on to what is a centrally contentious issue. I know it concerns the bar a great deal, and my own position is sharply at variance with that of the bar on this issue. That is, what should the impact be of the no-fault system on tort entitlement?

Let me say bluntly -- and this is a subjective judgement; I don't pretend that this is something that science tells me, but it is my judgement, based on extensive evaluation and interpretation of the empirical evidence -- in terms of containing premium costs, we should prohibit, as the bill proposes, the right to sue for economic losses beyond the no-fault benefits. I support that prohibition.

Why this is viewed as so radical is not clear to me. Workers' compensation schemes in force in this province, every other province of Canada and most of the rest of the industrialized world do exactly the same thing with respect to workers' comp benefits. It does not permit workers to sue their employers for economic losses sustained beyond the no-fault benefits.

However, I agree with the CBA, and was proposing to suggest this anyway, that insurers be required to offer optional top-up benefits, either on a no-fault basis or, as the CBA suggests, on an optional tort basis. Why not both, and let consumers decide whether they want to pay for additional coverage? But this would be, let me stress, additional coverage provided on a first-party basis that motorists would have to be willing to pay for.

So much for the prohibition on the right to sue for residual economic loss. I support that feature of Bill 164.

Let me move to the right to sue for non-pecuniary losses in all cases but subject to the $15,000 deductible, and subject, I might add, not only to the deductible but to the Supreme Court of Canada's ceiling of about $240,000 in 1992 dollars. I have serious reservations about this proposal. In fact, contrary to what was proposed in the previous interlocutory, I would advocate removing the right to sue altogether for non-pecuniary loss.

Let me qualify that -- at least if there is a concern over the impact of this package on premium costs. That is, if something has to be cut here, as Mr Winninger put to the CBA representative, I would not cut rehabilitation costs, I would not cut indexing, I would not cut no-fault coverage of economic losses. What I would cut is the right to sue for non-pecuniary benefits, that is, subject to some assessment on this committee's part that the package as it stands will generate unacceptable increases in premiums. If something has to be done to contain the projected premium increases, this would be my target.

Let me explain why. As the law and economics literature has pointed out -- and these are not socialists; these are people from Chicago -- this literature uniformly observes that one does not observe citizens, consumers, here or anywhere else, in voluntary first-party insurance markets buying insurance coverage for non-pecuniary losses.

Why is that? If it's as valuable as we've been told it is, why is it you do not observe people buying insurance coverage for all the sources of non-pecuniary loss they may sustain in life? Let me take a very extreme example. Why does one not observe parents buying life insurance on the lives of their children to cover the non-pecuniary grief they will suffer in the event of a child's death? Does anybody in this room with children have such insurance?

Mr Harnick: You can get it from the school. Every school board sells it and every parent buys it.

Dr Trebilcock: For non-pecuniary loss?

Mr Harnick: That's right.

The Chair: Order.

Mr Harnick: Every school board sells it and every parent --

The Chair: Order.

Mr Harnick: He asked a question.

Dr Trebilcock: My guess is, if you were to ask parents whether they know they've bought it, 99% would be totally oblivious to that fact.

Mr Harnick: It's very cheap.

Dr Trebilcock: I'm suggesting that if you go out and observe individual consumers and individual insurance markets, nobody buys insurance for the grief they will suffer in the event of their child's death. Why? Because money will do nothing to assuage their grief. You can't get the child back. What I infer from this and what the literature has uniformly inferred from this is that people place a relatively low value on monetary compensation for non-pecuniary losses.

Why do we call them non-pecuniary losses? The reason is precisely because money cannot replace the loss. Money can replace lost income and it can buy a relevant medical treatment, but it cannot replace a non-pecuniary loss. That's why we call them non-pecuniary. So if something has to go here, this is what I would eliminate. Let me add that all the empirical studies show that about 45% of all accident compensation payments in this province and elsewhere are accounted for by non-pecuniary losses, that is, losses that citizens place a very low pecuniary value on.

My alternative proposal, to the extent one wants to retain the right to sue at all, would run along the following lines: I would focus first on the injurer's behaviour. That is, where injury has been inflicted as a result of intentional or reckless wrongdoing -- this is the egregious drunk -- and that conduct has caused serious and permanent physical or psychological injury, then in that case and that case only would I allow a tort action.

In that case I would allow it for full tort damages, economic and non-pecuniary. That involves egregious misconduct by the injurer and serious injury to the victim, which would be an even tighter threshold than in the existing regime. But in that set of circumstances, I believe concerns about deterrence, corrective justice and even retributive justice manifest themselves in their strongest form.

Let me go on to one other feature of the government's proposals that I am concerned about. It does not appear in the bill as such, but it appears in their study The Road Ahead. I am concerned about the proposal to prohibit or otherwise constrain "unfair use of age, gender and marital status" as rating variables in the sale of insurance. The Road Ahead goes on, at page 20, to say that some motorists, such as young men, will enjoy lower rates as a result. I strongly disagree with this proposal. I regard it as radically misplaced egalitarianism, and I am restraining myself to be so charitable.

Again, the empirical evidence from Quebec shows that moving to any kind of flat-priced, first-party, no-fault system, which in Quebec reduced insurance rates for young male drivers from $2,000 or $3,000 a year to $300 a year, simply induces an increase in the population of these high-risk drivers on the roads. The two very careful studies that have been done have shown an increase of 6% to 8% in fatality rates, largely as a result of this. I think it is totally irresponsible to move in this direction.

Let me bring this down to earth. In our Alberta study, in a random sample of 577 bodily injury claims in Alberta for 1990, we observed that 10 claims out of this 577, that is, 1.7% of the claims in the sample, accounted for almost 40% of total losses, 40% of the total payouts.

I asked the insurers who were carrying coverage for the defendants in this case to provide me with a profile of these 10 claims. Of these 10 claims, much as I predicted, nine involved male defendants. Six of these defendants were young males between the ages of 17 and 24. Seven of the 10 claims arose out of accidents in rural settings, not in urban settings, and five involved alcohol impairment, three of the five involving young males. These are a high-risk class of driver, and I can't tell you how strongly I object to the notion of granting dispensations to them in premiums.


Let me close by making a general point. In terms of reducing the cost of auto insurance, there are only two ways to go: One, you can reduce the frequency of accidents, and two, you can reduce the level of payouts for those accidents that still occur.

We have largely been talking about what kinds of benefits to pay out to victims of accidents. I have not spoken much about how to reduce the underlying accident rate. There was some general discussion, not nearly precise or specific enough for my taste, in The Road Ahead, as to how we can reduce the accident rate, because reducing the accident rate will have a direct bearing on insurance costs. Here again, the empirical studies done around the world are now relatively unambiguous in their findings, no matter how politically unpalatable.

First, raising the driving age has a significant effect on the underlying accident rate. Second, raising the drinking age has a significant effect on the underlying accident rate. Probationary relicensing regimes for young and inexperienced drivers where they are subject to a curfew, they cannot drive after 10 at night or cannot drive with other teenagers -- I reflect on the accident report in this morning's paper.

Graduated licensing schemes have been demonstrated to have a significant effect on the underlying accident rate. Wider use of short-term licence suspensions, more continuous enforcement of drunk driving laws and not just at Christmastime, more aggressive enforcement of seatbelt laws, all of these things can reduce the accident rate.

I conclude that, through expanded but sensitively designed no-fault benefits, most victims of traffic accidents will be compensated reasonably generously for their economic losses: 98% as opposed to 60%. Compensation will be paid much more quickly and rehabilitation promoted and fewer resources -- probably a 20% to 30% resource saving will occur by reducing the transaction costs in the system. Little deterrence will be sacrificed at least with properly rated premiums, and premium costs can be contained to reasonable levels. Thank you very much.

The Chair: Thank you. Mr Harnick.

Mr Harnick: Sir, I read your brief with some interest. I don't know on the basis of your brief how you can then explain an insurance scheme like the province of British Columbia's. It's a first-party scheme. It pays full economic loss. It pays non-pecuniary loss. It provides reasonable accident benefits and the premiums are lower than the premiums that we pay and it provides all the coverage that a person realistically needs in today's modern society. Your brief essentially says that a scheme like that can't possibly exist, but it does. How do you explain it?

Dr Trebilcock: I don't think I did say that. The British Columbia scheme, apart from the fact that it's administered through a state agency, is very much like the old Ontario no-fault system of a few years ago, except the no-fault benefits are somewhat more generous. The last time I looked in 1991, they provided for a maximum of $300 a week in income replacement; $300 a week is not very generous.

Mr Harnick: Sir, if I tell you that a child who's rendered a paraplegic, quadriplegic or is brain-damaged is going to be paid by this government under Bill 164 the equivalent of $391 a week for life -- I guess you'd say that's not very generous either.

Dr Trebilcock: No. I don't pretend that it is generous. The question that I think I posed frankly was, what about the 40% of traffic accident victims who get nothing out of a tort system?

The Chair: Mr Winninger.

Mr Winninger: Thanks.

Dr Trebilcock: Suppose my child is turned into a paraplegic by my own negligence in driving this child to the hockey rink. I get nothing out of the tort system -- zero.

Mr Harnick: But we don't have just a pure tort system here. We have a blended system.

The Chair: I'm sorry, sir. I've got to go on to the next questioner with Mr Winninger.

Mr Winninger: Thank you, Mr Chair. Normally I'm argumentative with the witnesses, but in your case you're so convincing, I can't disagree with you except on a couple of points.

First of all, it's been said a number of times that no one has come forward with unqualified praise for the statute, and I suggest to you that your support is most welcome.

Second, you seem to go a little further than we went in terms of non-pecuniary loss. I know there are different opinions on whether there should be a deductible or not and just where it should lock in. Certainly, we've increased rather than decreased access to tort for non-pecuniary loss. Could you comment on that?

Dr Trebilcock: I said that, as a first principle, I would provide very generous coverage of economic and medical rehabilitation costs, I would not provide no-fault benefits for non-pecuniary losses and I would not provide a right to sue for them.

Mr Winninger: I think I understand your position.

Dr Trebilcock: If I can just qualify that.

Mr Winninger: Sorry.

Dr Trebilcock: I would particularly take the position that there should not be a right to sue for them if there are now concerns over the level of premium increases driven by the no-fault benefits.

Mr Winninger: I should correct, for the record, that it was Allstate this morning that was seeking an 8% increase, and I should have known that. They're my own insurer, at least until I heard from them this morning.

Secondly, on the issue of ratings, I think you understand that ratings under our proposal would be based on driver experience rather than arbitrary variables such as age, sex or marital status. If indeed the reckless driver is visited with punitive increases in premiums, would that not offer a sufficient deterrent in a no-fault system?

Dr Trebilcock: Basically, under the bonus-malus system that you are talking about, you only suffer a penalty once you've committed an accident. I like the idea of my 19-year-old and 17-year-old sons knowing that before they step on the road either they or I will have to pay a $3,000 premium and that they ought to be awfully careful or dad is going to get awfully mad.

Mr Winninger: You would disagree with the Supreme Court, then, on this point?

The Chair: I'm sorry. Mr Mancini.

Mr Mancini: Professor, I've enjoyed your presentation this afternoon. I think you've made a lot of points. I particularly like the comments you made about the road safety agency that we should have in this province and we don't have. You might be aware that the government did introduce some enabling legislation quite some time ago. There's quite a bit of dust on that piece of legislation, and we're all curious as to why the legislation hasn't been brought forward. We've sat through these committee hearings for two weeks, listening to and being lectured to by numerous members from across the floor, but no one's ever talked to us about the road safety agency.

You added a new twist this afternoon that I'd like to talk about a little bit. You suggested that of course it would be unfair, and I agree with you, to make seniors and women pay more for their automobile insurance just so that young men could have the privilege of driving. I wasn't aware of either the statistics or the information that you brought forward, that in fact when this happens we get an increase in the number of young male drivers and that compounds the situation that much more and adds so much more to the costs of the whole system. Could you please elaborate on that, and could you tell us where we could obtain more information on that particular subject?

Dr Trebilcock: I have statistics for both Ontario and Alberta -- not just these 10 claims but aggregate accident statistics from police accident reports; that's the principal source -- that show driver involvement by age and sex in fatal accidents, drunk driving accidents and other casualty accidents. If we had time, I could show you bar graphs now compiled from thousands of accidents, and young males between the ages of 18 and 23 are up here; women of the same age are down here.

Mr Mancini: Could you please make that information --

The Chair: I'm sorry, Mr Mancini, your time has expired.

Mr Mancini: I just want to ask the witness to make the information available to the committee, that's all.

The Chair: Your time has expired.

Mr Winninger: Point of order, Mr Chair.

The Chair: Yes.

Mr Winninger: I think Mr Mancini is making a very valid point. Perhaps this information could be made available through the research assistant to all members of the committee so that we can evaluate it.

The Chair: Okay. Mr Tilson, do you agree that he can answer this?

Mr Tilson: Yes.

The Chair: Okay. Go ahead, Mr Mancini.


Mr Mancini: It's nothing any more complicated than a straightforward request to have the information tabled with the clerk so the members can see it so we can use it during our further proceedings. I think it's quite important information and you've added a new twist to our thoughts here.

Mr Phillips: It's a good idea.

The Chair: Okay. I'd like to thank you for appearing before this committee today, and if you could file that with the clerk for the members of this committee, we only need one copy and we can photocopy it. Okay?

Dr Trebilcock: Fine.

The Chair: Thank you.


The Chair: The next group coming forward is the Association of Canadian Insurers. I'd like to welcome you to the standing committee on finance and economic affairs. We have one half-hour here, and as you can see, the members of the committee are anxious to ask questions at the end of your brief. You can start now, and please identify yourselves for the purposes of Hansard and the residents of Ontario here. You may begin.

Mr John Lewington: Good afternoon, Mr Chairman, members of the committee. My name is John Lewington. My associate today is Lew Dunn, and we represent the Association of Canadian Insurers. Our brief is before you and we do not propose to read it into the record in order that there is time for your questions at the end. We'll outline our thoughts and get quickly to a question period.

We do want to offer a view of Canadian insurers on the future course of automobile insurance in the province of Ontario. There is a list of our membership in the brief. Eight of our 11 members have their head offices in this province. All except one have a very heavy commitment to automobile insurance in the province. Frankly, we live here, we work here, we provide insurance here and we invest our reserves for claims and other liabilities here. We're a very interesting group: three mutuals owned by their policyholders, one cooperative and seven stock companies. Our common bond is our Canadian identity. Three out of 10 drivers in this province are insured by these Canadian companies.

During the past five years our companies have adapted to many changes in the marketing of the automobile insurance product, including rate freezes and the dramatic changes introduced with the Ontario motorist protection plan.

Our two and a half years of experience with OMPP have produced many positive comments from our policyholders. The consumer appears to like dealing with his or her own insurer, in preference to the adversarial environment of Ontario's former tort system. The current environment has been good for customer satisfaction. The old adversary system of, "Sue me; I'll defend," has been replaced by company customer service and satisfaction as we work with policyholders towards rehabilitation from injury, salary replacement and return to work or to the essential tasks of life.

There is an issue that was brought to your attention by the reinsurance research council that has a particular bearing on Canadian companies. It is important for insurance companies to smooth their losses over time so that one very large loss is not a financial catastrophe. Reinsurers are alarmed by the combination of unlimited rehabilitation and medical coverage plus indexed salary replacement and increased access to tort.

What we have with Bill 164 is a stacking of benefits that looks pretty dramatic to the reinsurers. A recent actuarial study commissioned by a major reinsurer estimated that the cost of catastrophic claims, in excess of $1 million, would increase by 14 times due to the rise in the level of benefits from OMPP to Bill 164.

Canadian companies do not have the opportunity to spread these risks of capital exposure inherent in the proposed bill over international operations. Canadian insurers rely heavily on reinsurance companies to smooth out their loss cost and to provide the capacity to underwrite business competitively. The lack of adequate reinsurance facilities or the dramatic increase in the cost of reinsurance will create instability for the market and will particularly affect indigenous Canadian insurance companies.

For my own company, Gore Mutual, in the first 18 months of OMPP we were subjected to the three largest automobile claims ever presented to our company. If Bill 164's costs are greater than OMPP, and I think that's generally acknowledged to be the case, then our company will definitely need the support of international reinsurers.

Lew, would you like to say a few words about capital and withdrawal?

Mr R. Lewis Dunn: Thank you, John. Just so that you're aware of it, John in his other life, aside from representing ACI, is president of Gore Mutual, and I am president of Canadian General Insurance.

In our report, we've indicated that we're much happier with the revisions to the withdrawal provisions as they're now drafted as opposed to in the original bill. However, I think it's fair to say that we fail to see why there is any need for withdrawal restrictions of any sort in a sensible market.

Our report does not deal specifically with the issue of capital adequacy, but Canadian companies are concerned about an inability to raise capital if premium levels prove to be inadequate and surplus margins are eroded. While foreign companies generally have access to international capital pools to support their operations, we must rely solely on domestic markets for the raising of capital and must rely on their willingness to invest capital in our industry.

Due in large part to the continuing uncertainty surrounding Ontario automobile insurance, it is clear that capital markets presently show no interest in investing in our business. If companies cannot charge adequate premiums for any reason or if capital is depleted in the early stages of a revised plan while proper premium levels are determined, Canadian companies are most vulnerable, particularly the smaller ones, which have been an important part of the Ontario economy for many years. Those companies with access to capital, namely foreign companies, will be in a position to take advantage of this. The end result will be increased foreign control of the property and casualty industry in this country and a loss of jobs as integrations occur, many in smaller communities, where Canadian companies tend to be centred.

Mr Lewington: I've had the opportunity of reading some of the summaries from your deliberations over the last two weeks, and the question of tort has come up on a number of occasions. There have been a lot of questions about tort and access to tort here today.

The existing system is the end result of an intensive study designed to strike a balance between the rights of individuals and the affordability of the product. It is also worth remembering that the verbal threshold that OMPP contains has only been tested by the courts two times to date. In the US, where verbal thresholds have been adjudicated over a longer period, the trend is to broaden the definition over time. Perhaps all Ontario's threshold needs is a longer test of time to satisfy those who would like more people to access the courts for excess economic losses and pain-and-suffering settlements.

Bill 164 extends the right to sue for pain and suffering, subject to a $15,000 deductible. We are concerned this will not control claims costs. The current cap on general damages established by the Supreme Court is totally dependent on economic loss being paid in full. There are sound arguments that first-party benefits do not constitute full payment of economic loss, and therefore there's a real danger that the court's cap will no longer apply. We suggest that this be addressed in the bill if Bill 164 is to proceed.

Since settlements may vary between jurisdictions, there will be shopping for the most generous domicile in which to commence an action in order to ensure that a plaintiff's claim meets or exceeds the $15,000 deductible. In addition, we agree with other presentations that the $15,000 will become a starting point, not a deductible. We'd probably also agree with Professor Trebilcock that non-pecuniary suits might be the place to start cutting back Bill 164 if this committee should agree that Bill 164 is going to be too costly. Lew, would you like to say something about claims costs and the accident benefits?

Mr Dunn: I'd like to take a few minutes to comment on Bill 164 as it relates to accident benefit claim costs. I know that this committee is probably hearing cost issues ad nauseam over the last several weeks; however, this is undoubtedly the most critical issue that we're dealing with here. The issue is not uniquely Canadian, but it concerns our members, as well as it does all other insurers, and my comments on the accident benefits reflect the experience that I have had in this field.

I've been in the insurance business for some 28 years, and for over 20-odd years of that time I was involved in the employee benefit field, specializing in underwriting and claims administration for disability income replacement benefits. I am an actuary, a fellow of the Society of Actuaries and fellow of the Canadian Institute of Actuaries.


The first thing I would like to point out to you, and it is in our document, is that the benefits under Bill 164 create the most generous benefit system in totality in this country. Since costs follow benefits, it therefore follows that Ontario drivers will have the highest costs of any province in Canada for their auto insurance. It must also be recognized that there are no mature statistical data on which to assess the costs of OMPP's accident benefits.

The major difference in cost between the Mercer and IBC studies is the assumption regarding long-term recovery rates. Even at 30 months, which is the OMPP experience base to date, the Mercer figures are proving to be far too optimistic. There is no other plan today which provides benefits comparable to OMPP, and there is no other plan which provides the arbitration and appeal process we have when benefits are terminated by an insurer. Therefore, there are no statistics on which to base the implications of cost of those particular elements. That creates uncertainty in terms of the cost comparisons that you see.

I don't believe that even the IBC costings reflect the true cost of OMPP, and they certainly significantly understate the cost implications of the changes under Bill 164. Allstate alluded to this somewhat this morning in that its own studies indicate that losses will be higher under Bill 164 than those currently estimated.

In looking at accident benefit costs, it must be understood that the greatest impact on the uncertainty of costs is the number of individuals who remain disabled beyond 24 months. There will be very little disagreement among professionals with respect to the cost for benefits in the first two years. You might think that at 24 months following an accident, only the most serious of disabilities will remain. I can tell you from our own experience, Canadian General has 21 claimants receiving accident benefits now for 20 months or more. Some 16 of these claimants are soft-tissue injuries: three involve fractures, none of which are particularly serious, one involves damage to a knee and one involves a head injury.

These claims, I would suggest to you, are influenced by factors other than just the accident: the type of employment, the availability of employment, the motivation of the claimant, the lifestyle of the claimant. All of these factors have a significant influence on claims which remain beyond 24 months.

What does Bill 164 do to increase the likelihood of claims continuing beyond 24 months? First of all, it extends benefits at significantly greater levels to individuals who do not have stable employment records or perhaps opportunities for employment. Most importantly, it sets up a bureaucratic structure to essentially assume management of claim files after 24 months. The strength which the private sector brings to the table in managing disability claims is virtually removed at the end of a 24-month period.

The provisions in Bill 164 create a government bureaucratic structure. The best comparable thing that I can find to what's created is the workers' compensation program. I would suggest if you like workers' compensation, then you'll love Bill 164. The actuarial statistics that are currently being used do not recognize this and, if they did, the magnitude of the underestimation of benefit costs would be a shock to all of you.

You must remember that unlike workers' compensation funding, private sector insurance companies are required to reflect future disabilities on a fully funded basis. We cannot meet solvency requirements by assuming that future premium flows will make up today's experienced deficits, as is currently the case with workers' compensation in Ontario.

The important message is that under Bill 164, there are going to be significantly increased benefit payments, and these benefit payments, I believe, will exceed any estimates which you have seen to date.

Mr Lewington: In summary, given the current economic environment, any changes in the auto insurance product should be minimal, as the real cost of coverage that is currently being provided has not yet been determined. Furthermore, there does not appear to be any widespread dissatisfaction with the auto insurance product as it's presently being offered.

We, the Association of Canadian Insurers, believe the present system (1) works well; (2) there's a well-thought-out balance of coverage and cost; (3) provides the tort protection the most seriously injured require; (4) has some weak spots in the benefit structure; (5) can be modified, fine-tuned for improvement, such as addressing the problems of the self-employed, the small business owner and getting around to doing that review of benefits that was promised under the original bill; (6) all at a fraction of the cost increases contemplated in Bill 164.

Alternatively, Bill 164 should be delayed until the cost issues are resolved and industry and government actuaries agree on the level of claim cost changes called for by this bill.

We do appreciate the opportunity to express our views. Thank you for listening.

Mr Owens: Thank you, gentlemen, for your presentation. I just have some quick questions for you. In terms of your concerns about the withdrawal provisions, I'm pleased that you've recognized the changes that the government has made with respect to withdrawal.

I am concerned, though. You talk about the movement of capital in the free-enterprise system. Just in terms of how the association views its corporate responsibility and your position within insurance companies, do you, as members of the insurance industry, feel that you have a responsibility to the consumers who have bought policies from your companies, that they have some type of reasonable notification that you're in fact going to withdraw from a particular market?

Mr Lewington: Mr Owens, Gore Mutual is a 150-year-old company. We are owned by our mutual policyholders. There's no question about the responsibility which management has towards its policyholders.

Mr Owens: So in carrying out that responsibility, if you were going to withdraw from a particular line of insurance -- or other companies for that matter -- do you view that 180 days' notification as being reasonable to ensure that consumers are protected, the market is kept stabilized?

Mr Lewington: I would agree that that kind of notification is not unreasonable.

Mr Owens: In terms of the deductible, we keep hearing different views on the $15,000 deductible. We heard earlier from the Canadian Bar Association that the deductible is in fact too high and it's recommended that we lower it to $7,500. Do you have a position on the deductible in terms of, is it too high, too low, is it a good place to be?

Mr Lewington: Frankly, we feel that the verbal threshold is the right way to go, but if there has to be a deductible as contemplated in Bill 164, $15,000 would appear to us to be probably the starting point for claims after a period of time when the claimant gets used to the system.

Mr Dunn: I think it's fair to also comment, as was expressed by one of the individuals this morning, that the involvement of the legal process with claimants is not necessarily something which benefits claimants in terms of getting them back to useful status or useful functioning in society. Any concept of a deductible essentially, as was expressed this morning, brings the legal profession into the picture in a much more significant way than we presently have under the current environment.

Mr Owens: Is it your view that we can, through companies like yours, provide to consumers in this province a comprehensive benefits plan delivered within a reasonable period of time within the private sector framework? In terms of some of the criticisms -- it's not only lawyers who have taken a little bit of a beating through this process, but the insurance companies certainly have come in for some criticism as well from victims who have testified --



Mr Owens: Can I finish my question, please? What kind of assistance are you prepared to offer, through your individual companies, through your association, to ensure that in fact consumers do get the kind of responsiveness they require at a time when they're injured and feeling extremely vulnerable?

Mr Dunn: Our companies all have involvement in various industry associations which play a part in some of that. Many of the companies have consumer relations departments which provide a role in that. There's clearly a role for government, I believe, in some respects in helping with that communication process as we have at the present time.

The Chair: Okay. I'm going over to Mr Mancini.

Mr Mancini: Mr Phillips has one question before I take the floor.

Mr Phillips: I appreciate your brief. As you're probably well aware, we're into our third week of these hearings and it's proven to be --

Mr Lewington: My condolences.

Mr Phillips: -- fascinating. Some of the things keep coming back to me. One of our very first witnesses said that as far as he was concerned, this is a solution in search of a problem. I don't think I've ever seen a piece of legislation that seems to be tinkering with something that seems to be working as much as this does.

For the people out there watching this who are unemployed or facing real problems in paying their bills, to see their Legislature tied up dealing with a bill that plans, as far as I can determine, to increase the cost of insurance in this province by about 10% -- it probably will take about $400 million more in premiums out of the province. I think over 90% of all the witnesses would say to us, "We would strongly prefer to leave things as they are instead of going to the revised bill."

For whatever reason the government wants to -- even if there aren't enough problems out there, they want to stir another problem up. I thought this tiger was kind of sleeping quietly, but we're going to jab it now. I guarantee you, as people out there look at premium increases of 10% to 20%, the phones will be flying.

My question to your group is: What is your own best view on what implications this might have for auto insurance premiums in the province, recognizing that this comes on top of the normal cost increases? Has your organization a view that you could share with us on it?

Mr Lewington: We're in the process in our company of discussing with our actuary what we need right now. I heard Allstate this morning indicate they would be coming to OIC asking for an 8% increase. I don't think ours will be quite that high, but we do require a change right now. I've heard numbers kicked around from 4% to 20% depending on whose study you look at. They all seem to agree that the costs are going to go up. I'll take the middle road, I think. Your 10% doesn't sound out of line.

Mr Phillips: Thank you.

Mr Dunn: Mr Phillips, as I indicated earlier, in my own personal view, based on my experience in the disability field and as an actuary, those cost increases will prove to be inadequate in relation to the cost of benefit that we will see. I would certainly opt for the high side and suggest that, over time, even the high side could well prove to be inadequate.

The Chair: Thank you. One minute left.

Mr Mancini: Just a small point. The parliamentary assistant indicated earlier that lawyers had been heavily criticized in this process and that the insurance industry had also been heavily criticized. I want to let our witnesses know that the Ontario government was criticized to an extent that makes one curious as to why it's proceeding with this legislation.

There is no advancement on the road safety agency; no willingness to review Bill 68, as was contemplated, to see what amendments could be made to help people who've fallen between the cracks; no concern, it seems, for the rate increases that seniors and women will face; absolutely no concern as to the disruption and turmoil that's been caused in the industry.

I want to ask you very clearly, do you feel that if this insurance business had not been made such a gigantic political issue over the changes OMPP brought in, do you think maybe, if circumstances had been less politically intense, you'd have a better opportunity to work with the government and put forward opportunities which would give people the product they need at a fair price?

Mr Dunn: I think the current environment has seen a substantial amount of discussion between the industry and the government, and the industry has put forward, I think in a very positive way, many proposals that we feel are much more acceptable to the consumer. What is difficult to judge at this point is whether the political agenda will recognize those particular issues or not.

Mr Tilson: Just following along the same line of questions that Mr Phillips and Mr Mancini have been speaking to you about, the insurance industry seems to be the one industry, the one group of people the government has spoken to. They obviously haven't listened to you, but you're the one group they have at least spoken to.

The strange part of it is that this is a government that was concerned about the OMPP as a party in opposition. They were concerned about the rights that were taken away from innocent accident victims, and they were concerned about higher rates.

Sir, on your comments about taking the middle ground, no matter what ground you take, rates are going up, whether it's 4%, or now we're up to 25% by the insurance group this morning, and you're right, it's probably somewhere in between, but if you take somewhere between 4% and 25%, for average people who are worried about losing their jobs and worried about their house and bankruptcies and paying taxes and all of this stuff, why are we doing it now?

It would assist me as an opposition member to hear some insight as to your observations, because maybe they can be persuaded to delay it. That was one of the issues you raised in your presentation. Obviously, now they've got a task force. They had the bright idea to have a task force, literally weeks before these hearings took place, and they're going to have a task force that's going to study the issue.

They don't understand the benefits. Nobody understands the benefits. Nobody is sure about the costs. Do you have any insight you can give to me as an opposition member to try and persuade these characters to slow up on this process?

Mr Lewington: Mr Tilson, being president of an insurance company is an extremely complicated task. It's like a juggler keeping six balls in the air at any one point in time. I have an adage in my company that if it's not broken, don't fix it.

Mr Tilson: This government has an adage, if it's broke, break it.

Mr Lewington: In this particular case, if OMPP had followed its course, at the end of two years there would have been a review of benefits under that program. A lot of the suggestions that have been made in the first two years of OMPP for improvement of the benefits to take care of some of those contentious issues, such as the self-employed person, have been suggested to the government within the context of OMPP.

Mr Tilson: As a national organization, which I gather you are, there have been some suggestions that for people coming from outside the province, this whole package will have an effect on the tourism industry, particularly people from the United States. Have you had an opportunity to speak to any international organizations and any international insurance companies as to further comments on those allegations?

Mr Lewington: I have not.

Mr Dunn: I have not.

Mr Tilson: Okay; thank you very much.

The Chair: Thank you. Time has run out. I'd like to thank you for your presentation before this committee, and have a good day.


The Chair: The next presenter is the Canadian Mental Health Association, Ontario Division. Come forward, please. I'd like to welcome you to the standing committee of finance and economics. We have half an hour, until 4:20. We're 20 minutes behind because we moved from room 1 down here and there was some setup time involved. Sorry for the delay. You may begin.

Mr Oscar Johvicas: I appreciate the venue, because I was here before several years back when we were discussing Bill 68 and I'll make reference to that in my statement presentation here today.

Mr Chair, members of the committee, I appreciate the opportunity indeed of being here to discuss Bill 164, which you are currently having public hearings upon.

The Canadian Mental Health Association, Ontario Division, is an incorporated, registered, non-profit charitable organization chartered in 1952. I can't resist the opportunity, though, to mention that our national body is celebrating its 75th anniversary next year. Over 4,000 volunteers are active in direct board and committee service in a network of 35 branches located in communities across Ontario, and I suspect many of the communities the members of the provincial Legislature here come from will know of their CMHA branch in the community. Ontario division and branch services and programs are funded through government grants, local United Ways and supplementary fund-raising activities.


As you know, on October 5, 1991, the government of Ontario introduced Bill 164, An Act to amend the Insurance Act and certain other Acts in respect of Automobile Insurance and other Insurance Matters. The bill was introduced to remedy some of the inequities of the previous administration's new Ontario motorist protection plan through providing automotive accident victims with higher benefits and increased opportunity to claim for so-called pain and suffering.

On October 13, 1992, the Legislature of Ontario gave second reading to Bill 164 and referred it to this standing committee. The CMHA, Ontario division, has requested the opportunity to make a presentation on Bill 164 as it did on the original Bill 68, which the CMHA believed was flawed.

As I suspect you also know, on October 23, 1989, the Minister of Financial Institutions in the previous administration introduced for first reading Bill 68, the Insurance Statute Law Amendment Act, 1989, also known as the new Ontario motorist protection plan. This legislation introduced a modified no-fault automobile insurance system into Ontario with a very high verbal threshold. If a person suffered an injury, either directly or indirectly, from an automobile accident, that person or his or her estate was prohibited from suing for damages unless that person had "died or had sustained a permanent and serious disfigurement; or had sustained a permanent and serious impairment of an important bodily function caused by continuing injury" -- and I emphasize -- "physical in nature."

This was a clear case of discrimination based on physical as opposed to psychological or mental injury. Those accident victims who suffered a serious and permanent mental or psychological injury as a result of an automobile accident were excluded from the threshold determination.

We felt so strongly that Bill 68 was seriously flawed because of its discrimination between physical and mental automotive injuries that we appeared on January 9, 1990, before the standing committee on general government to which the bill had been referred for public hearings following second reading.

As part of our presentation, we referred to the Canadian Charter of Rights and Freedoms under the equality rights, subsection 15(1), which states, and I quote, "Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability."

Clearly, the exclusion from the threshold determination of those suffering from a mental disability was not providing equality before and under the law, nor equal protection and benefit of the law.

Even Ontario's own Human Rights Code provides that every person has a right to freedom from discrimination on the ground of handicap, which includes a condition of mental retardation or impairment or mental disorder.

What the Canadian Mental Health Association found particularly objectionable about Bill 68 was the way in which it reinforced the stigma against those with mental disorders by giving credibility only to physical injuries, as demonstrable injuries for which compensation could be sought through the courts. Psychological and mental injuries were treated as if they could not be substantiated and therefore individuals sustaining these injuries were not provided with an equal opportunity to bring a legal action for fair and just restitution.

So obvious was the transparent discriminatory nature of Bill 68 that when the CMHA, Ontario Division, invited medical and mental health organizations to come together to review the legislation, the following organizations joined together as a mental health coalition in opposing the discriminatory nature of Bill 68: the Advocacy Resource Centre for the Handicapped, ourselves, the Ontario Head Injury Association, which I think you heard from earlier today, the Ontario Medical Association, the Ontario Psychiatric Association, the Ontario Psychiatric Hospitals and Hospital Schools Association and the Ontario Psychological Association, which I understand you're hearing from later today.

On February 6, 1990, these major Ontario organizations held a media conference to unanimously express their opposition to the discriminatory nature of Bill 68.

In spite of this strong denunciation of the discriminatory aspect of the legislation, including individual appearances by most of the organizations mentioned above before the standing committee on general government, the government of the day proceeded and passed its bill and thousands of innocent accident victims were denied fair and equitable recompense because theirs was a psychological or mental injury.

While both opposition parties had opposed Bill 68, it became apparent that a correction to the discriminatory nature of the new act could only be through a change of government. Much to our surprise, and I suspect to both the outgoing and incoming governments, in September 1990, the government did change.

The newly elected administration commenced with automobile insurance reform which resulted in the introduction of Bill 164. This bill recognizes that the victims who are not at fault and who are seriously injured through a motor vehicle accident should be compensated for pain and suffering. In addition, this bill provides access to reasonable benefits to individuals injured in a motor vehicle accident.

We applaud the proposed section 267.1 of the act, which states that the right to sue for non-pecuniary loss -- pain and suffering -- is preserved. This section effectively opens up access to the courts to many of the estimated 85,000 people who annually, prior to Bill 68, were able to seek compensation. The result is that the discriminatory aspect of the previous act has been removed and physical and psychological injuries are both viewed as equally legitimate injuries. However, in our optimism for this recognition of the right to sue for severe psychological injuries, we are assuming that the term "bodily injury" in section 267.1 will be given the widest interpretation in the courts.

If those who suffer from severe psychological injury, for example, a mother who sees her infant die in an automobile accident, even though she wasn't a part of the accident -- she was standing on the roadside and was not directly involved -- that person should be recognized by the courts as someone who can indeed suffer a "bodily injury" as a result of post-traumatic stress.

However, the courts, similar to legislatures, are subject to a perception that if one cannot see the physical injury, then it does not or may not exist. There is a continuing scepticism in our society of any disorder that is perceived as being all in the head. However, there are diagnostic tools which can measure cognitive impairment and affective difficulty, ie, psychological injury, with objective findings. The measurement of post-traumatic stress disorder and chronic pain injury are now being regularly taken into consideration in assessing both physical and psychological injury in such places as the Workers' Compensation Board.

We would like to make a special commendation of the Honourable Brian Charlton, the former Minister of Financial Institutions who, when the minister responsible for automobile insurance review, invited us to make recommendations. Naturally, we requested that the discriminatory nature of the previous legislation be removed. The current act is viewed as unacceptable in its discriminatory treatment of psychological injuries as a result of automobile accidents. It is our perception that Bill 164 has removed that blatant discrimination and we wish to thank those committee members here and those in the Legislature who will continue to be vigilant in opposing such discrimination and correcting it when it occurs.


I don't know whether it's within your jurisdiction to take this final recommendation, but perhaps it could be passed on to the appropriate levels of government for their consideration. We noted earlier that the original Bill 68 appeared to violate both the Canadian Charter of Rights and Freedoms and the Human Rights Code of Ontario. Obviously, when government itself introduces legislation which is blatantly discriminatory, there needs to be some remedy other than the court of public opinion or through the long, expensive legal process of appealing all the way to the Supreme Court of Canada.

It should be possible for organizations and individuals to recommend to a body such as the Ontario Human Rights Commission that it review the possibility that a piece of provincial legislation is discriminatory and in violation of either the Canadian charter or the Ontario Human Rights Code. When a bill is being examined for systemic discrimination, the bill should be restricted from reaching third reading until the advice of other relevant authoritative bodies has been received by the standing committee reviewing the bill.

In that way, the public could be assured of better protection from bills that initiate or reinforce discriminatory practices. Furthermore, organizations such as ours with very scarce resources could be saved the time and cost of working on issues which we believe should be attended to through official channels of communication already open to the government.

I thank you for your adherence to my statements on this legislation.

The Chair: Mr Mancini.

Mr Mancini: No questions.

The Chair: Okay; Mr Tilson.

Mr Tilson: Thank you, sir. There are more and more groups that have been coming to this committee and asking that the legislation be delayed for the reasons you've given, for the issue of uncertainty as to what it's really going to cost, for some sort of cost factor not only to the insurance industry, but to the government with the increasing bureaucracy that will be created not only in the government, but in the insurance commission, and on it goes. I thank you for coming and giving that counsel. Hopefully this government will listen to somebody, because I think it should be delayed as well. I don't think we know enough about all the implications of this bill.

Mr Johvicas: Actually, I wasn't counselling for delay and I suspect that justice delayed is justice denied. But to take your point, I'm not opposed if the bill needs further study, and I'm very happy that I think the bill addresses our concern about Bill 68, the current act's discriminatory aspect.

However, even if it's delayed or if the current legislation is brought in, and we want it brought in and enacted because we think it removes discrimination, we're not arguing about whether it costs more or not. I can perceive that there are things that may cost more. I think most people have perceived that in one way or another it's probably going to cost more.

What I'm talking about is, whatever guidelines are put in place, be sure to treat the mental injury and the physical injury equitably. It doesn't have to cost more. The way you put your thresholds and what not, as long as you treat them equally, then the cost factor's immaterial to me and it's just a question of the appropriate authorities figuring out what an appropriate and reasonable cost might be. All I'm talking about is equitable treatment. I'm not saying throw the doors wide open and the sky's the limit. I'm just saying, please treat both injuries equally.

Mr Tilson: I guess the difficulty, sir, is that we have been guaranteed by almost every delegation that's come forward to this committee that costs will be going up. Even the government has now admitted it, although the minister keeps saying there's not going to be any rate increases, which will be interesting. Even the government is saying this whole package costs more. I guess the difficulty is that now, in a time of recession, someone has to pay for it.

Mr Johvicas: Yes, and I don't think the people who are psychologically or mentally injured are the ones who should pay for it, so what I'm saying is, treat them equitably and adjust your cost levels as the government, in its difficulty in a recessionary period, sees fit.

Why is it more reasonable to not give just compensation and benefit to those who are mentally and psychologically injured in an automobile accident than to turn this whole thing over? Why don't we just go in reverse? Let's give whatever we were planning to give in financial resources to the physically injured to those who are psychologically and mentally injured. It makes about as much sense to me that the solution is not to limit fair and reasonable and non-discriminatory coverage under the charter and the Ontario Human Rights Code than to do the reverse. That's all I ask you to do. Just think, why should only those people who are physically injured be compensated? That's unfair.

Mr Tilson: Having talked about the loss of rights to the people you represent, and that's a legitimate concern of all of us, would you spend some time on how the specific issue of economic loss, loss of future income, affects the people you're representing.

Mr Johvicas: It's really sort of peculiar for us to be here, and we're only here because of the limited discriminatory aspect. Most of the people we're involved with, whom our branches provide direct service to in your community, are chronically mentally ill, and those aren't the people, unless they're involved in an automobile accident, who are going to be really affected by this legislation, except that they're citizens in the province and may be in an automobile accident.

Mr Tilson: No. People involved in motor vehicle accidents who sustain the injuries you're speaking of are going to have a major problem. They're going to lose their right to sue, their right to recover, whether you're talking of the student who has been training or whether it's a medical student -- all of those people.

Mr Johvicas: I understand that, and it's an individual --

Mr Tilson: Who's going to speak for those people?

Mr Johvicas: I don't think the Canadian Mental Health Association has a mandate to speak for those people any more than any other group has a mandate, because --

Mr Tilson: The more voices we have, the better, sir.

Mr Johvicas: Yes, but we're concerned with mental and psychological aspects of legislation, and when it comes to the economic aspects of this legislation pertaining to loss of income, that is not a particular mandate that we, other than as being regular citizens ourselves, are particularly chagrined about or concerned about. I'm not here to speak as an individual citizen; I'm here to speak on behalf of our organization.

Mr Tilson: The difficulty, of course, is that this legislation affects all of us and in many respects the same way, whether it be economic loss -- certainly, the issues you raise zero in on this specific area, but the overall issues certainly encompass the people you're representing and I'd like you to spend -- have I got much time?

The Chair: You've got about 15 seconds.

Mr Tilson: Fifteen seconds: I wish you good afternoon and thank you for coming, sir.

Mr Johvicas: I thank you.

Mr Klopp: Thank you for coming today. It really makes me wonder when someone can sit here, a colleague in this House, and say to you, "Thanks for trying to defeat this bill," when quite frankly, as you pointed out, it you weren't. It makes you wonder how much they're listening to the rest of the arguments and to the discussion today. I find it amazing.

Your comments are quite interesting. You've been around here today. We've been told by our opposition critics that nobody needs this and, "I'm healthy as a horse, so to hang with everybody else." In fact, at one point today it was even mentioned that we've made a political decision to change what we felt was flawed in that previous bill. Of course it's a political decision. I'm an elected politician.

But it's really people like you who put my side, that I'm healthy today, and you are here representing a group of people who were left out. I need to hear this, because so many times we just think, "Well, I'm healthy today and to hang with somebody else." If we're lucky to be healthy, we need to take care of our brothers and sisters who aren't. I really think that, and I am getting more and more convinced that this bill is a far better bill than what we've seen before. I thank you for your time to talk for those people who really need someone to be there. I'm sure you don't get a big paycheque to do it and I'm certainly glad you are doing that.

When we talk about the benefits, there have been a number of other issues that we put in place. Do you know any more about those benefits, ie, if you get into an accident today and you are employed, you can get further benefits? Are you aware?

Mr Johvicas: Yes, I'm aware of the services the government is putting into place and has available through the different benefit services it has, whether it comes through the current OHIP system or whether there are other benefits that the bill introduces and provides to people directly to rehabilitate them, psychological injury included. We're very appreciative that this kind of service will be made available through the legislation.

I do want to say as well, if I may, that we certainly aren't here in any partisan way. We condemn legislation when we think it's not serving the interests of our clients and people who potentially can become our clients. We commend, and I think it's important to do so, when a government's acting appropriately to remedy something that we thought was flawed.


Mr Klopp: I think that's what committees are for, to hear all sides. I think it's a great process. It just really bothers me when someone seems to say something good or bad and they turn right around. I wonder how well they're listening. I certainly have heard a lot of concerns, but I've also heard a lot of positive directions. We have to look out for the victim as much as we have to worry about profit lines.

Mr Paul R. Johnson (Prince Edward-Lennox-South Hastings): I think it's commendable that you are attending today before this committee to make the comments you have, that the discrimination that existed previously in the OMPP will no longer exist under Bill 164. I think that certainly needs to be noted and I'm glad you came forward before this committee today to make that note. Indeed, you've mentioned the minister, Brian Charlton, and that he did listen to you.

I'd like to take this opportunity to make a comment. So often before this committee, the opposition members will suggest that we as a government are not listening to the people who are coming before us with all their concerns. I think even before we got to the committee stage, before this point in time, the minister was listening to those people out in their respective communities with their respective concerns and in particular your organization when it came forward. It's come forward today and you've indicated to us that the Canadian Mental Health Association, Ontario Division, had an opportunity to speak with the minister and bring forward your concerns. In fact, they were recognized and are recognized in Bill 164.

The Chair: The time has expired. I'd like to thank you for your presentation before this committee.


The Chair: The next presenter is the Canadian Association of Rehabilitation Centres. I'd like to welcome you to the standing committee on finance and economic affairs. We have one half-hour. Could you leave some time at the end of your brief in that half-hour for members of the committee. We'll start off with Mr Tilson when you're finished.

Mr Allan T. Walton: Let me introduce myself. My name is Allan Walton. My training is in psychology and I'm the director of rehabilitation centres. I've worked in the field of rehabilitation for 10 to 12 years now, treating workers' compensation as well as motor vehicle accident victims. I'm currently chief operating officer of Columbia Health Care, which has 14 rehabilitation centres, primarily in Ontario, the vast majority treating motor vehicle accident victims. I'm also the president of the Canadian Association of Rehabilitation Centres which represents 40 different treatment centres in Ontario.

My comments today are also endorsed by the Canadian Association of Rehabilitation Personnel, which was not given time to speak. They contacted me yesterday to ask that their name be added to my comments, as well as Rehabilitation Services of Canada, which is one of the largest rehab providers in the country.

My comments are going to be limited to what we feel are the effects of Bill 164 on rehabilitation. To understand our position, it's necessary that you understand where we come from in rehabilitation.

Prior to Bill 68, we had the infamous tort system. As it happens, I have here with me briefs from the tort system. This is a real case. I'm seeing the patient on Thursday. It's an accident that occurred in 1985. This is the defence brief and this is the plaintiff's brief. We have here 59 various reports and articles from different physicians, yet I've been asked to see this patient on Thursday. This case is still not settled. This is a soft tissue injury with a minimal accident.

Rehabilitation under the tort system was always one of conflict, but I don't think many people really understood the conflict it put the injured motorists in. The information they got from their physicians and health care providers was that they had to resume a normal lifestyle as quickly as possible, yet their lawyers told them their settlement was largely based on how badly they were doing, how sick they were and how disabled they were. So we were constantly battling these two forces. Of course, we always had our battles with the insurance industry and there were a lot of problems with the pre-Bill 68 legislation.

With the introduction of Bill 68, the OMPP, there was a resolution of many of those problems. There was improved access to rehabilitation, there was increased funding, and while increased funding was important, the increased access was probably more important. But I think there was another certainly more subtle but much more dramatic effect of OMPP and that was that there was very little litigation. I do agree with the Ontario Mental Health Association that that threshold is discriminatory and should be changed, but it did reduce the amount of litigation. Success rates in our clinics have risen, patients are no longer in conflict and we have a consensus between the insurance company, the patient and the health care provider that the goal is to return to a normal lifestyle.

I make reference in our presentation to a published research article on behavioural research and therapy done in 1991. In that paper the patient population was large enough to have a subset of those who were undergoing litigation. What they found was that 48% of the patients contacted a lawyer within seven days. This was in British Columbia. Chronic pain was significantly more common in those litigating and the general impact of pain was reported as significantly higher even though there was no difference in measures of pain, anxiety or depression. This research article mirrors exactly what we've found in Ontario when treating patients.

There are problems with Bill 68, there's no question. There are a lot of attitudes that have to be changed. There is still some conflict with the rehabilitation industry and the insurance industry, but that change is occurring. Subjectively, certainly all of our members -- I remind you that's over 40 clinics in Ontario -- have found there's been greater patient compliance and greater success without litigation.

Our major concern with Bill 164 is the change away from the threshold to the concept of pain and suffering. There is a sense right now in the majority of patients we see that if they have a motor vehicle accident, they cannot sue unless their physical damages are catastrophic. By and large that's true, notwithstanding the recent court challenges. They approach rehabilitation with a much healthier attitude.

With Bill 164 and the opportunity to get compensation for pain and suffering, you are going to have patients who are going to approach their lawyers, probably within seven days as in British Columbia, to find out if they qualify for their pain and suffering, because Lord knows, everybody's suffered more than $15,000. What their lawyers will tell them, quite accurately, is: "I don't know yet. We'll have to see how much pain and suffering you have. The longer you're off and the longer you're disabled, in all probability the more pain and suffering you will have."

At the same time, they will inform their clients that they must participate in rehabilitation or their benefits may be reduced. That patient will then come to our rehabilitation centres and he will participate. At the same time, he will be back in the old tort system where he's been told quite clearly, "If you improve, then your compensation under pain and suffering will likely not be there or be significantly reduced."


Frankly, this legislation, if passed, will be a financial windfall for rehabilitationists. We will make a lot of money with this legislation. Patients will be attending our clinics longer than they had before, because there's little incentive to get better and there's a lot of incentive not to. A lot of controversy will go on, and we will have this type of thing yet again as we try to determine whether there's pain and suffering with that patient.

Notwithstanding what we feel will be a financial windfall if this passes, we are not in support of this legislation. We think it's premature. Bill 68 is very new. We're operating under two systems right now. It is our opinion, as an association, that Bill 68's faults can be remedied by a change in the definition associated with the threshold. One of the major changes would be to incorporate psychological problems, which would be consistent with the Ontario Mental Health Act, and some modest changes in the schedule of benefits. To embrace Bill 164 would simply bring us back to the days of tort and, it is our opinion, would significantly impede the recovery of injured motorists.

We have opinions on the details of Bill 164. Myself, Dr David Corey, Dr Hamilton Hall and some of our other members have followed the legislation over the years, but it was our decision not to delve into that at these hearings as we felt that the major premise of Bill 164 was flawed. Frankly, we didn't want our views diluted and sidetracked on other issues.

If the intent of Bill 164 is to throw money at injured motorists, then I think it does so very well. If the intent of this legislation is to assist injured motorists in recovering, this is a giant step backwards.

Mr Tilson: It's interesting when you talk about the subject of rehabilitation. It has been said that already people are saying, whether it be lawyers or whether it be advocates advising the people who have sustained injuries, you have to qualify for this $15,000; in other words, just delay. The very thing you're talking about that occurred with tort actions: delay. Don't go to rehabilitate, don't get too much better, because you might not qualify for the $15,000, which of course is going to be a penalty in the first place because you get $20,000 and you take $15,000 off and all you're getting is $5,000.

As you were making your presentation, already I've heard people making those comments that injured people will be advised not to rehabilitate, not to seek out rehabilitation and to delay their recovery simply to qualify for this so-called new NDP threshold test. I don't know if you have any thoughts on that or whether or not you've heard any remarks similar to that.

Mr Walton: Certainly that's possible. That happened in the past, but frankly that's not our major concern. Our major concern is that it's much more insidious than that, that quite unconsciously patients know what's going on. We have had cases in the past where lawyers have told their patients to find a job and lose it and have instructed them very clearly on how to behave.

What I'm more concerned about is the effect of something like the BC system, where it's very routine for patients to carry around a pain diary for years. Lawyers supply them. Now they're supplying them with tape recorders as well. Whenever you have a twinge, whenever you have a pain, tape record it or mark it down, all in the interest of documenting pain and suffering. I'm more concerned about the insidious effect of that rather than any blatant instruction to stay off work or not participate in rehabilitation.

Mr Tilson: Is this system going to be replacing one system that has defects with another system that has perhaps a different type of defects, all at an increased cost? I'm thinking specifically of the adversarial system. In the past, you had two or more parties involved in the motor vehicle accident, and they went at it through their insurance companies and fought it out in court. Now of course these people, unless they meet this deductible test, will be going at it with the insurance companies, and may go at it with the insurance companies anyway, for various benefit packages.

Insurance companies are telling us that it's going to be more and more difficult for them to provide the benefit packages that the government wants them to, so they're going to be tougher to deal with, and hence you'll have another -- I mean, you've showed us a package of medical documents. Do you foresee that same sort of adversarial system or same sort of adversarial presentation could be made vis-à-vis insurance companies?

Mr Walton: Sure. I think that was the basic premise between 164, really to place people in opposition. At least Bill 68, with its flaws, had some consensus to it. We had a difficulty in changing attitudes within both the rehab and the insurance industry, but things were moving along and working. The introduction of 164 really does place everybody in opposition yet again, and like I said, we've built an industry on that, as has the bar.

This is a real case. It was frankly fortuitous. I had it in my case. It wasn't a setup. I'm seeing this patient Thursday, and this will go on.

Mr Tilson: The socialists have traditionally said that we're all the same and we should all be treated the same and we're all equal, although some people are more equal than others, that old expression.

I guess I get to the question of the rehabilitation benefits, the packages that are going to be put forward. Is it possible, financially and otherwise, to put forward packages that can meet everyone's needs to meet their standard of living that they've been accustomed to, the way they lead their lives? In other words, is it possible that they may receive those same rights they may have received under former systems under the system that's envisaged by 164?

Mr Walton: I'm not sure that we as a country or province even subscribe to the idea that we're all equal.

Mr Tilson: They do. They say we're all equal, we're all the same, and that's the flaw that I see in this process. We're not all the same. I mean, whether you're Liona Boyd or Tom Henke or whoever, we're not all the same. We all have different talents and we all need to be compensated in different ways, and that's the flaw of this government. Do you have any thoughts on that?

Mr Walton: I agree with that. I mean, I agree with that to some extent. I must admit I do have some difficulties with the concept of the threshold, which allows economic recovery for certain classes of people, but frankly I'd rather go to a complete no-fault than 164. That's a real problem.

But it really is a myth that we in Ontario treat everybody the same. If I'm in a motor vehicle accident then I have access to either $500,000 or, if 164 goes through, unlimited rehabilitation funds. If I slip on my own sidewalk, I do not have access to those kinds of funds and I don't have access to the kind of expensive treatment centres that would treat me for that. So we really don't subscribe as a province to the premise that we're all treated equally. What we're really talking about is, where should the boundaries be and what are the fairest boundaries we can find?

Mr Tilson: I thank you, sir, for coming.

Mr Winninger: I guess I have to confess I'm having a little difficulty in knowing where you're coming from on this. You come to us as a person who provides rehabilitation services to clients, yet you're saying that we shouldn't have removed the $500,000 cap on rehabilitation and presumably the 10-year limit on that. I might ask you first of all whether you've canvassed your clients to find out whether they approve of your taking this position or not, because it seems to me it would be prejudicial to their interests under any system.

Mr Walton: I would suggest to you that the $500,000 cap is used by a very few and the vast majority of them qualify under the threshold. The real problem wasn't the amount of money. In fact, on rehabilitation, none of our members, without exception, feel that the cap should be unlimited. Frankly, we are more concerned about the limit being taken off and then suddenly a $3,000 cap being placed on treatment before it can be stopped. That's much more insidious. The rest is smoke and mirrors, frankly.

Mr Winninger: That's why we set up a task force to look at standards and guidelines for long-term care and rehab. What do you do with your clients who are over the 10-year limit or the $500,000 cap? Do you just ignore their interests?

Mr Walton: I would like to see Bill 68 there long enough to test it.

Mr Winninger: What about all the people who come to us and complain about having problems accessing their rights and remedies under Bill 68? Do you agree that this bill actually makes it easier for a doctor or therapist to provide accident victims with rehabilitation and makes it more difficult to stop paying benefits?


Mr Walton: In Bill 164?

Mr Winninger: Yes. With the independent assessment, for example.

Mr Walton: No. I don't see that at all. With Bill 68, particularly for treatment services to the vast majority of our clients, which is psychological and physiotherapy and so on, the access has been greatly improved. With a physician's referral, the insurance company must pay even pending a dispute. That has been reduced in Bill 164 to $3,000. Now, for somebody with a head injury, supplementary medical benefits are at a maximum of $3,000 if there's a dispute with the insurance company. That was not there in Bill 68.

A head injury assessment will be $1,500. That provides very little treatment beyond that before there is a cap, which was not there in Bill 68. That is the more insidious part of Bill 164. That is the objection.

Mr Winninger: It may be in fact that your association has misinterpreted the regulation. Are you aware that there's no $3,000 limit on supplementary medical benefits and that the $3,000 refers to the amount that the insurer must pay in respect of a particular provider or expense pending dispute?

Mr Walton: Exactly. So if a patient is referred to one of our centres and there is a dispute on that -- I must remind you that the Insurance Bureau of Canada helped me interpret this yesterday. If there is a dispute right now, the amount is unlimited pending resolution of that dispute. Under this legislation, the proposal is that that be limited to $3,000. Now, we were told by the IBC that that was specifically to avoid having US companies, who charge high fees, have access to our patients.

Mr Winninger: I guess I would put it to you that while there have been differing opinions expressed here on the threshold for pain and suffering suits and for economic loss and the rating system, what there has been, I think, is virtually unanimously expressed support for the improved rehabilitation sections.

Mr Tilson: Unanimous? Are you kidding?

Mr Winninger: We've heard this from the Advocacy Resource Centre for the Handicapped, the Consumers' Association of Canada, independent adjusters, chiropractors and, in particular, what might be some of your sister organizations, like the Organization for the Multi-Disabled and the Head Injury Association of Thunder Bay. Why is it that they enthuse greatly about the rehabilitation benefits that Bill 164 offers compared to the OMPP and you're so critical?

Mr Walton: Because the vast majority of the people you described are not rehabilitation providers. We're there in the front line treating patients. And I remind you, I'm speaking now for 450 rehabilitationists in 40 clinics in the province of Ontario. Unanimously, we are in agreement in our position here and we are the ones out there treating. You have not had the vast majority of rehabilitation people speaking here who have requested to speak here. Their representation here has been limited.

Mr Winninger: Do you think rehabilitation should be consumer-driven or supplier-driven? I mean, surely the people who can offer the best evidence as to the long-term care and rehabilitation they receive are the actual consumers. They seem to be quite pleased with what we're offering under Bill 164 and they have no financial interest one way or the other.

Mr Tilson: They don't even know what hit them.

Mr Walton: Exactly. They're quite happy on Bill 68.

Mr Winninger: You're not giving them much credit, are you? We've heard some very convincing presentations from the consumers.


The Chair: Order.

Mr Mancini: He's making up stories.

Mr Winninger: No, I'm not.

The Chair: It's a difference of opinion. Mr Mancini, you'll have your chance.

Mr Winninger: I leave it to you to fabricate. I don't make up stories.

The Chair: Okay, you have to ignore some of the side conversations.

Mr Winninger: Is there time left?

The Chair: I know the one answer you gave, you got right into it. Mr Tilson's mike is not on, so just carry on and ignore your right ear there.

Mr Walton: I didn't know Mr Tilson needed a mike.

The Chair: Okay, fine.

Mr Winninger: Is there time left?

The Chair: You have one minute left.

Mr Winninger: I put it to you that you haven't really put forward a viable alternative to what Bill 164 offers. How would you streamline the mediation process? How will you ensure that insurers pay now and dispute later? I'm no apologist for the tort system; people who have come before here will know that.

Mr Walton: As I mentioned, we can address some of that. Certainly, in the short answer, because there is a limited amount of time, I would put the cap of $500,000 back on. I would remove the $3,000 limit and I would allow the insurance companies the right to initiate an arbitration should mediation fail.

Mr Winninger: If you removed the $3,000 limit, don't you approach the $500,000 cap a lot faster?

The Chair: I've got to go on to Mr Mancini. Mr Mancini, you've got the floor. Go ahead.

Mr Mancini: I don't intend to speak over Mr Winninger.

Mr Johnson: Since when?

Mr Mancini: Since Mr Winninger took so much umbrage because we wanted to inform the witness that a lot of the things he was recalling to you were an exaggeration. We have not had a whole host of people before the committee telling us how great Bill 164 is. As a matter of fact, it's been exactly the opposite.

Mr Klopp: He said the benefit package.

Mr Mancini: Mr Walton, you're exactly right when you said that front-line rehabilitationists like yourself -- if the government members want to listen -- have not had a lot of opportunity to make your case. That's why they're taken by such surprise.

Earlier today, when Dr Corey was in, when he told the committee that Bill 68 was working fairly well and that success rates in his clinic that he operated had increased from 50% during the tort years to over 75% since OMPP, it caught the government members off stride, because the government admitted today before the committee, during questioning, that it had not canvassed people like yourself. They had not canvassed people like Dr Corey. We asked Dr Corey --

Mr Owens: Not true.

Mr Mancini: You know the government members take so much umbrage when we make a comment or two --

The Chair: Mr Mancini, would you carry on?

Mr Mancini: Mr Chairman, I have six minutes and I'll use it how I see fit.

The Chair: If you want to talk to the government members, that's fine.

Mr Mancini: I want to tell you, Mr Chairman, the government members take so much umbrage when Mr Tilson or I add a word to the proceedings, and yet for the last 30 seconds I have had nothing but constant interjections from the parliamentary assistant who sits right next to you, and you've had not a word to say.

Mr Walton, when Dr Corey was in here this afternoon and he was telling the committee members about the improvements of patients who need rehabilitative care, I asked him whether he had been canvassed by the government in regard to his findings prior to the introduction of the bill. Dr Corey said he had not. I asked him if he knew whether other people who were doing similar rehabilitation work had been canvassed. He thought that canvassing by the government was not done.

You're here before us. You told us earlier on that you're the CEO of 14 clinics, I believe. Were you canvassed by the government to find out whether Bill 68 was delivering better rehabilitative care since its introduction as compared to the tort system? Were you canvassed?

Mr Walton: No, we were not, we --

Mr Mancini: Fine, thank you. I do this for the express purpose of the parliamentary assistant who interjected saying that everybody had been canvassed and the facts are that everyone has not been canvassed.

Mr Owens: Would you let the witness finish his answer.

Mr Mancini: The other reason the government members feel a little bit disjointed this afternoon is because usually they like to take pride in saying they've talked to front-line workers, people like yourself and people who work in your clinics, and say, "We've talked to the front-line workers and therefore we know what the concerns of the consumers and the deliverers are." They've not done that and that's why we had the questions for Mr Winninger placed the way they were.

The other thing that disjoints the government members -- I commend you for this because we've had other groups who've not taken your position. You've come in to say: "Yes, we believe we have enough money, don't put more money into the system. Let's make sure that we access the money and the services we need immediately and properly." What you're telling us this afternoon is different from some other groups, who maybe were motivated more by their self-interest than by other particular needs that have to be addressed.

Would you agree with me that Bill 68, the present Ontario motorist protection plan -- I took very seriously the comments made by the gentleman representing the Canadian Mental Health Association as to what he had to say about Bill 68. If the proper length of time were given for Bill 68 to work, and if the government and this committee spent its time trying to assess the shortcomings in Bill 68 and incrementally improve Bill 68, would you agree that Bill 68 is far superior than Bill 164?

Mr Walton: I would agree with that. The one provision I would like to see is exactly the same one the mental health association would like, which is a change in psychological. I was speaking with Lee Samis yesterday morning, in fact, with IBC. It is his opinion, and I agree with it, that we can likely come to a consensus on the wording of a threshold that would be acceptable to the psychological association and the mental health association without having to dramatically change the bill.


Mr Mancini: I was going to say to the gentleman who presented to the committee on behalf of the Canadian Mental Health Association, but I felt reticent in saying so, because the oversight was so dramatic, that I believe the requirement that was in Bill 68 which obligated the Legislature to receive a review of how Bill 68 was working was put in there for a good purpose.

That purpose was to show to legislators, with the assistance of community people like yourself, the Canadian Mental Health Association and others, where we might have been wrong and where for a modest fee the insurance benefits could be increased to the consumers, who have to carry and pay for the whole shot.

The Chair: You have 30 seconds.

Mr Mancini: In closing, I want to thank you for appearing before the committee and giving us the information you have, because you were absolutely right when you said earlier that you are giving us a perspective which this committee has not had before. People who are doing the work you're doing have not had as great a standing before this committee as others and I join the committee in taking responsibility for that. Thank you for coming.

Mr Owens: On a point of clarification, Mr Chair: The witness indicated on a question from Mr Mancini that his organization had not been consulted. My understanding from ministry staff, sir, is that you have met with the deputy minister, Blair Tully, at least once if not twice. Is that not true?

Mr Mancini: That's not a point of clarification; that's further questioning.

Mr Walton: We met with him once over a year ago and had no further contact until we were contacted the week before these hearings and given an arbitrary time to prepare.

Mr Owens: By the clerk.

The Chair: Thank you.

Mr Tilson: Let him finish. That's interesting.

Mr Walton: In fact we had to pull to request enough time to get hold of our members. We were phoned the week before, I believe it was on a Thursday, and told, "You will be allowed to appear the following Wednesday at 4 o'clock," and that was it. We had to jump through hoops to get that time changed, to have enough time to get in touch with all our members and prepare.

Mr Owens: And that phone call was made by the clerk.

The Chair: I'd like to thank you for appearing before this committee.


The Chair: The next group is the Ontario Psychological Association. Would they come forward, please. You have one half-hour, until 5:10. Would you mind identifying yourselves for the purposes of Hansard and the citizens of Ontario. I'd like to welcome you to this committee. You may begin.

Dr Ronald Kaplan: I am Dr Ronald Kaplan and I am here with my colleagues representing the Ontario Psychological Association. I am a clinical psychologist based at Chedoke-McMaster Hospital in Hamilton, Ontario. I am co-chairman of our association's task force on automobile insurance. With me is Dr Ruth Berman, the executive director of the Ontario Psychological Association, and Dr Gary Snow, a psychologist at Sunnybrook hospital and co-chairman of our task force on automobile insurance.

It is a pleasure to be given an opportunity to express our views on the proposed changes in automobile insurance legislation. The Ontario Psychological Association has been actively involved in the debate over automobile insurance and we had the opportunity to speak before a similar committee that was reviewing Bill 68.

The Ontario Psychological Association is a voluntary organization representing the profession of psychology in Ontario. Our membership of approximately 1,400 includes psychologists, psychometrists and graduate students. Our profession has a long-standing interest in treatment of the psychological and neuropsychological disorders and pain that are the consequence of our epidemic of automobile accidents and its devastating impact on human life, health and wellbeing.

Bill 68, the OMPP, the predecessor of Bill 164, is our current system of compensating and rehabilitating accident victims. Our association, in concert with many others, as you heard from Mr Johvicas, strongly opposes the thrust of Bill 68 to create two classes of accident victims: those with permanent psychological injuries, who would have no legal rights, and those with permanent physical injuries, whose full rights would be guaranteed. We are gratified to see that Bill 164 does away with this discrimination in Bill 68.

We argued previously that the success of the social safety net envisioned by Bill 68 would depend on a collaborative educational effort. We believe that many problems with the current system arise from a failure of insurers to educate their staff and their clients, a failure of government to educate health professionals and the general public and the lack of authority of the Ontario Insurance Commission to reach out and guarantee that accident victims know their rights and which benefits they should receive.

Widespread communication among the insurance industry, government, health care professionals and consumers has not occurred. The accident victims and their families with whom we work are not informed of the range of benefits that they can access or the system for resolving disputes. Physicians do not know that Bill 68 creates a mechanism for accessing services from a wide range of health care providers. Insurance industry staff are often poorly educated about their critical role as facilitators of treatment and rehabilitation.

There is an unacceptable degree of variation in the quality of service offered accident victims by the member companies of the insurance industry. We believe that education will be as critical to the success of Bill 164 as it has been a key factor in the extraordinary difficulty many accident victims are having with their benefits under Bill 68.

In our last appearance before the Legislature we described the particular economic problems of women, children, those with psychological disorders and owners of small business. Let me focus on the latter issue. Indeed, a large proportion of psychologists are small business people and are very concerned with this. Individuals who run small businesses go into debt to do so, borrowing money and often mortgaging their homes. Bill 68 was particularly harsh on small business people because they receive no compensation for excess economic loss unless their injuries are permanent. Thus, small business people risk loss of all their capital without hope of compensation. If the small business folds, their employees also run the risk of job loss.

Bill 164 perpetuates these special problems for small business people. They risk their life's work and wealth going down the drain without hope of regaining their lost investments. We do not believe it is fair that those who take the greatest risk and do the most for economic development in this province face loss of significant capital investment while employees of large businesses are compensated under this law. We believe the weekly income cap in Bill 164, coupled with total restriction on lawsuits for excess economic loss, is based on an inappropriate understanding of the economic situation of many citizens. There must be a better solution for these business owners.

One of the essential features of our current legislation, Bill 68, is to create a situation of inequality in knowledge of rights and access to advocacy between accident victims on the one hand and insurers on the other hand. Bill 68 provides no funds for the victim to gain access to legal guidance but places no limits on the insurer using the best of legal advice. Bill 68 uses complex, cumbersome, uncertain and expensive-to-interpret language, a verbal threshold, to determine legal rights, while at the same time providing no means for compensating the accident victim for the cost of determining if he has legal rights. We are concerned that Bill 164 also fails to create a system where accident victims have ready access to knowledgeable, experienced advocates and compensation for the cost of obtaining independent legal advice.


The complexity of the regulations in Bill 164 is a great source of concern. Let's imagine that you're not a member of the Legislature but indeed you are a brain-damaged accident victim. You have persistent pain. You're heavily medicated and you are trying to determine your entitlement to weekly income under Bill 164. You obtain a copy of the regulations for Bill 164 and you try to interpret them. You aren't successful. Who's going to explain and re-explain to you your rights and benefits? Does the person who is explaining your rights to you have a conflict of interest? Is that person knowledgeable? If you are an accident victim and need advice from a legal expert, how can you pay for that advice? Are you, as an accident victim, required to negotiate your treatment and income replacement with your insurer or can someone else do it on your behalf and be compensated? We believe the regulations in Bill 164 are so cumbersome that they may put the accident victim, once again, at great disadvantage. We suggest that each of you read the regulations, as I am sure you will doing in the next few weeks, and see if you don't agree.

Let me now give you a slightly different perspective by asking the question: What has been the experience in providing psychological care under Bill 68? Firstly, you should know that the Ontario motorist protection plan is unique in health care legislation in Ontario. The Ministry of Health funds a medical care system heavily oriented towards physician-driven acute care, with a relatively small and poorly funded mental health and rehabilitation sector. Bill 68 contained a broader vision, that accident victims require access to a range of health professionals not easily available under the Ministry of Health system. Psychological care and personal and vocational rehabilitation are key features of the current Ontario motorist protection plan. This is the only legislation, for example, that guarantees citizens full access to the services of psychologists for assessment, treatment and rehabilitation. Bill 68 creates a mechanism for psychologists and other professionals to utilize their unique skills with accident victims and their family members. Bill 68 is not artificially capped; it does not restrict psychological care. Those who are mourning the death of their children or spouses in accidents, those who are suffering nightmares, phobias, depression, pain, who have experienced brain damage, can now receive early, targeted and complete psychological care.

Unfortunately, the proposed new regulations under Bill 164 allow an insurer to refrain from payment when disputing a bill over $3,000. Accident victims typically require psychological and neuropsychological assessment, functional evaluations, teaching of strategies to cope with pain, therapy for anxiety and depression, assistance compensating for mental impairment and the critical factor of family education and treatment. Assessment and therapy will be allowed to begin under Bill 164 but may be interrupted or terminated in the early stages when a relationship of trust is being established and the task of developing a treatment team and a comprehensive approach is at a critical stage.

The last two pages were changed in this presentation copy.

Accident victims will suffer if insurers interrupt therapy or the threat of non-payment is faced by the treatment team. Injured persons may experience further demoralization, intensification of depression and further loss of hope. Symptoms which are not treated become entrenched and disability is prolonged. Ultimately, this ends up increasing costs for the ensurer because when a therapy or rehabilitation program is finally approved after a dispute, the patient's situation is worse. This prolongs the duration of weekly income replacement and costs more than timely, targeted rehabilitation. We are concerned that the process of terminating treatment, seeking further funding, waiting for a determination and resolving disputes will undermine the fundamental purpose of Bill 164: early treatment and comprehensive rehabilitation.

We would remind the committee that in The Road Ahead the government estimated that repairing automobiles required 50% of the insurance dollars paid out, income replacement required 30% of the insurance dollars and supplementary medical and rehabilitation benefits only 15%. Ironically, the cost-saving emphasis is not directed to the most expensive item, vehicle repairs, but at a smaller item, the cost of repairing the lives of accident victims.

We would also draw your attention to a key objective of The Road Ahead: enhanced access to rehabilitation and medical benefits to assist the recovery of injured persons. We believe the government may be misleading the public by stating that there is no monetary limit on reasonable medical and rehabilitation expenses. In fact, the $3,000 limit creates a much more restrictive rehabilitation environment than the present OMPP. This is a policy -- raising the limit so that it's unlimited in time and amount, but placing a $3,000 cap -- that is inherently contradictory. It may place the accident victim at a further disadvantage.

In Bill 164 we are asking all accident victims to forgo compensation for excess economic loss, but we may also be creating a system that will hinder and stall rehabilitation and add a new level ofcomplexity to the process of receiving necessary care. We propose that if there's going to be any cap, it must be at a significantly higher level, that rehabilitation professionals should be allowed to negotiate directly with the Ontario Insurance Commission and the insurer on the client's behalf and that the Ontario Insurance Commission would have to create a fast-track approval system for rehabilitation.

Finally, we are concerned that the ministry did not include registered psychologists, who are gatekeepers under this law according to Blair Tully, in the advisory group to review this issue. We want to take the opportunity to thank the government and the ministry for being open and accessible for psychologists to express their views on the automobile insurance legislation.

We thank you for your time and would be pleased to answer questions.

Mr Owens: I'd like to thank Dr Kaplan and your copresenters. Dr Berman, we meet once again at Queen's Park. We had an excellent outcome the last time we met with respect to your organization and the needs that you addressed. I'm hoping my responses will start on the road to satisfying some of your concerns here today.

In terms of the task force, I'd like to indicate that there still is the possibility for the addition of members. That possibility has not been closed to you, and I appreciate your suggestion with respect to the addition of a psychologist.

In terms of your concerns around the $3,000 cap, I agree that when one is establishing a therapeutic relationship, that continuity is important in terms of trust-building and ensuring that both parties feel comfortable with each other in terms of the goals to be reached over the rehabilitation process.

In terms of the $3,000 cap, it is only if the insurance company is disputing a claim submitted by the claimant. Only at that point will the insurance companies be required to pay the $3,000, and then the claim will be subject to a dispute resolution mechanism. Our view is that if the claims made are reasonable -- and I have no reason to believe any of your members would be submitting unreasonable claims -- this should not be problematic. I see some concerned looks over there. Would you like to pursue it?


Mr Tilson: You've done away with the reasonable man. He's gone.

Mr Owens: He's certainly not a Tory. Anyway, in terms of your concerns with respect to the small business person, I'm wondering if you're familiar with some of the work we have done with respect to the small business person and the self-employed person here in the province. Dr Kaplan?

Dr Kaplan: I'm not sure what you're talking about in terms of the small business person and the work you've done.

Mr Owens: In terms of the regulations that do things like compensate a small business owner if he or she in fact has to hire somebody to carry on the business while he or she is incapacitated, were you aware that was done?

Dr Kaplan: We are aware that there have been improvements in terms of the regulations for people who are self-employed, but we have concerns that this doesn't cover all the gaps that the self-employed, the owners of small businesses, may encounter in trying to run their businesses.

We are not economists and we can't comment about all of this, but we continue to be concerned that there may be gaps for people who are running small businesses and may not be able to keep those businesses going. One of the concerns that we have is that the $1,000 cap seems to place some upper limit on what a person could experience.

Mr Owens: Absolutely, and in terms of the kinds of things that we've done, again, we've looked at simplifying for the purposes of determining income. We look at profit the same way as we do income taxes. There's been adjustments for non-cash expenses. There are a number of things we've undertaken to assist the small business owner. In terms of economic conditions, we can do what we can in terms of providing an enabling economic environment.

The Chair: Question, Mr Owens.

Mr Owens: I'd like to hear from you what kind of gapping have we not taken into account in terms of the small business owner, or the self-employed person, for that matter.

Dr Gary Snow: I'll start and perhaps Dr Kaplan has something to add to this. Let me just give you our experience under Bill 68. Most psychologists I know who work with people at present have encountered owners of small businesses who have had significant problems. They have lost their businesses under Bill 68.

One of the problems that we have, and it comes back to a point Dr Kaplan made, is that the current regulations are so complex that, not being economists, we can't figure out all the possible limitations. But it is important that if there is a $1,000 cap on weekly benefits payable to a person under this, and if other business expenses will not be paid during this period of time, then there remains the possibility the person could lose his or her business under this proposed system. That's one of the concerns we have.

If you look at our brief, you'll see that we haven't tried to address this issue in totality ourselves. We have suggested that the government consult with small business associations to make sure there are no gaps in there so that expertise can be brought to bear.

Mr Phillips: I appreciate the presentation. I try and put this thing in a bit of a broader context perhaps, in that the witnesses we've had before us are obviously speaking from their perspective and doing, I think, a very good job. The group that has difficulty getting here is the people who are going to pay this, the millions of drivers out there whose premiums, when this bill passes, are going to go up by 10% to 15%.

All of the people out there watching this right now are going to see their premiums go up $70, $100, in some cases substantially more. In terms of the economy, it's going to mean that if premiums go up 10% -- and most people think that's reasonable. That's not a bad estimate. I don't think it's reasonable, but not a bad estimate -- that's $400 million more that it will cost the people of Ontario, and it is in some respects regressive, because no matter what your income is, your premiums will go up. Even though you may be unemployed or may be on minimum wage, your premiums are going to go up the same as somebody who's making substantially more.

The reason I raise this is that I don't think we can view this in isolation, because you people are in the health area. The hospitals you practise at, Sunnybrook and Chedoke, both are getting zero increase: zero increase this year, zero increase next year. So here we are about ready to spend, if you will, or charge $400 million for this bill; that's what it's going to cost the people of Ontario. But at the same time the government says, "We don't have the money" -- and I understand that -- "for the 2% promised to the hospitals," which would have been $140 million.

The reason I go through all of this is to try and get your judgement, because I think your organization in many respects is very close to a lot of people who are dealing with the difficulties of a tough economy. In your judgement, is this the best use of $400 million of money of the people of Ontario, or are there better ways to spend $400 million?

Dr Snow: In terms of the amount of money that's going to be spent, we've seen different figures from different organizations. I think there have been at least four separate costings of that.

I think one of the positions that our association would take would echo what Mr Walton said earlier. Our association would far prefer to see money going into a comprehensive health care program for the province so that you didn't have to worry about covering psychologists under OMPP, so that taxpayers' dollars could give us a comprehensive health care system rather than a physician-in-hospital system.

Dealing with one of the points that you've raised, we've seen psychologists who have lost jobs in the past two years because of cutbacks in the hospital system. OMPP does give us the ability to step in and work with one particular part of the clientele, but the unemployed whom you've talked about, the people who are having difficulties because they are out of work, are people we are not allowed to help at this point because we're not covered.

In terms of the $400-million expenditure, we don't have the economic expertise to comment about where the costs are going to come out. We've seen so much variation that, being mere psychologists, I don't think we could come down one way or another in terms of what the cost is going to be.

Mr Phillips: Well, "mere psychologists" -- I think the government estimate itself would say it's going to be a minimum of $200 million, and then we've seen a variety of other estimates. I think it looks like it will be $400 million.

I keep raising this because I think the public quite properly wonder what in the world is going on when they are facing the economic situation they're facing and they see us planning to proceed with something which, in my opinion, based on all the witnesses we've heard so far, may have some modest improvements -- not clear, substantive improvements -- for a huge pricetag.

Dr Snow: May I just address that? I think one of the things you have to realize for our members is that most of the people we're seeing now under OMPP are not people who are uninjured complaining about premiums. They are people who have had injuries and who need our services.

In the context of the services, we are pleased with what has happened under Bill 68. With the exception of the $3,000 cap under Bill 164, we are pleased with the services that that provides. As psychologists, though, what we primarily deal with are the people who have pain, suffering, the people who need access, and our primary goal here is to make sure that whatever system is implemented works for the injured person following a motor vehicle accident rather than addresses the issue of premiums. I understand that the public has concerns about premiums, but we have to speak for the injured party here.

Mr Phillips: No, and I --

The Chair: I'll have to go on to Mr Tilson.

Mr Tilson: One of you used three or four words that sort of stuck in my mind. I think it's an excellent choice of words, and that is that this legislation is reaching a new level of complexity. It really is. Whether you're for or against the tort system, it took years and years and years to develop. Even the subject of that fine-tuning between general damages and economic loss, you know, all these cases that went to the trilogy and put caps on things -- it took years to develop this.

The insurance companies are now saying, and many others are saying the same thing, that Bill 68 didn't have enough time to develop. We have a case called Meyer on one side and another case, Dalgliesh I think it is, on another side, and one goes too far and one doesn't go far enough, depending on who you're talking to, I suppose.


The fact of the matter is that the insurance companies are saying that more time is needed to give the courts a chance to define a test, to clarify that test and decide whether it's good or not. Now we're going to have all kinds of complications, complications as to the $15,000. Are the courts going to lean over backwards so that people qualify for that? Because of the fact that there's no economic loss, is there going to be a whole new meaning to pain and suffering so that perhaps there won't be a cap on pain and suffering?

I guess it goes on and on. We're going to have yet another set of litigation. The big issue is uncertainty. As a member of the Legislature, when I have people involved in OMPP cases come to my constituency office, they don't understand. Now this stuff is going to thoroughly confuse them.

I'm sure your patients or people that you've talked to haven't had an opportunity to express their thoughts on Bill 164, because even the government can't figure it out. What's your opinion with respect to that uncertainty, if you've directed your thoughts to that, and the effect that it's going to have on our society as a whole?

Dr Snow: One of the things we say in our brief is that we feel the government should, if Bill 164 is passed, make every effort to try to explain to the public what the $15,000 and the $5,000 new financial threshold test on pain and suffering would mean. Our experience at this point is that with the current system, most people don't understand what their rights are and how the current system works. The new system is far more complex. With the new system, we will also introduce three separate systems that work at different times.

If we go ahead with Bill 164, it's obviously going to take an extensive amount of education to bring the public up to speed in terms of what happens if your accident was prior to 1990, prior to the new threshold. We are concerned about the complexity of that in terms of the kinds of clients we see. But I would return to Dr Kaplan's point as well, that we're going to need someone to explain this to individuals who have been involved in motor vehicle accidents and we're concerned about where that explanation would come from.

Dr Kaplan: Just to make that point, whatever threshold you have, whether it's verbal or financial, we're learning that it introduces uncertainty. The verbal threshold under Bill 68 was, in our opinion, designed to be maximally confusing and uncertain to all of us. I spoke on this issue as early as four years ago before the Kruger commission and to Justice Osborne.

Now we're dealing with a financial threshold. I don't know if it will be as complex, but when we limit rights by some kind of device, it does lead to complexity and uncertainty; we can't avoid that. As psychologists, our concern is whether innocent accident victims, or not-so-innocent accident victims, have a mechanism for getting the best possible advice about where they stand, whether it's Bill 68 or Bill 164.

Our clients are people who have a lot of difficulty figuring out these very complicated insurance systems, and they need a lot of support and advice. Under Bill 68 and Bill 164 as envisioned, there's really no one who is independent explaining to the accident victims what their situation is.

Mr Tilson: I agree, notwithstanding the fact that the parliamentary assistant says, "Oh, well, we'll expand the advocacy legislation," in other words, a form of public defender system which will be totally unacceptable for providing the expert advice that is required.

Mr Owens: That's not what I said.

The Chair: One minute.

Mr Tilson: I'd like to compliment you on the subject of economic loss with respect to the small business men. Notwithstanding the comments that have been made by the parliamentary assistant, if you have someone running a convenience store, for example, that person may or may not be making the profit it appears, and he or she will be pouring money back into the business. I don't think the regulation takes that into consideration.

If they clear $25,000, on paper at least, because they're pouring money into the business, 90% of the profit is $22,500, but they'll never in a million years be able to hire somebody at $22,500. The result is that the business goes down the tubes. Notwithstanding the suggestions made by the parliamentary assistant, all of that is uncertain, and there's a great deal of fear among the small business persons.

The Chair: I'm sorry, Mr Tilson, the time has run out.

Mr Tilson: I thank you for coming.

The Chair: I'd like to thank you for appearing before this committee today. Have a good day.

Mr Tilson: Mr Chairman, I'd like to speak on a point of order.

The Chair: Your point of order?

Mr Tilson: Mr Chairman, the next procedure we have in this committee is the subject of clause-by-clause. The difficulty I and my caucus has is the time needed to prepare for suggested amendments, if any, to this legislation. I understand that the summary of the testimony that has been given throughout these proceedings, including today's, may not be available until the end of this week. The concern we have, in properly preparing to participate in clause-by-clause discussions, is that more time will be needed to review the summary of the legislation, the summary of the suggestions that have been made by members of the public. Otherwise, you know, we're just going through --

The Chair: Okay. I fully agree with your point of order. Let's put Friday, February 12, at 4 pm, as the deadline for handing in amendments, if you agree with the Chair on that.

Mr Tilson: The difficulty I have, Mr Chairman, is that as I understand it, the summary -- and perhaps we can have some input on that -- of the presentations, including today's, may not be available until that time.

Mr Andrew McNaught: That's right; probably by Friday.

Mr Tilson: I can tell you that if the summary isn't available until Friday, it'll be nigh to impossible to prepare, taking into consideration all the recommendations that have been made by delegations to this committee.

Mr Owens: On that point, from a personal perspective, I certainly sympathize with Mr Tilson's position. However, the members of the third party have consistently been available and taking notes and I'm not sure we can hold this process up. The Hansards are available for perusal. In terms of the time frame that has been set up, we've already had some delay by the unexpected passing of our legislative colleague. In terms of the clause-by-clause, I think the Chair's suggestion of the amendment exchange taking place on the 12th of this week, as suggested in a memorandum to the clerk by Mr Mancini, is a perfectly reasonable suggestion.

The Chair: Mr Mancini has requested that time and I thought it was favourable with the government and with the official opposition. I take it the third party could wind up agreeing also.

Mr Tilson: Mr Chairman, quite the contrary: I spoke to Mr Mancini earlier today on this subject and he agreed that the Liberal caucus will require additional time to prepare and analyse the suggestions that have been made by the delegations from around this province. We had a very strenuous trip last week going around this province and certainly I think we'll need time to analyse those reports, Hansards and, more importantly, the summary that's being prepared by the legislative people.

The Chair: What I have, this letter -- there's nothing here stating that there's another change to be made. I think with our schedule, especially this committee, we're pretty tight with the budget coming up and we can't delay the clause-by-clause.

Mr Tilson: I can't help what the Treasurer is up to. I'm simply saying this is very important legislation and we need to study it. There's already been an impression given by this government that it's in a terrible hurry to deal with it without consultations. I know the parliamentary assistant may or may not disagree with that, but the fact is that those allegations have been made, and here we are on this committee, rushing it through. There's no need to rush this legislation through. There's no need to rush the clause-by-clause discussions through, particularly when we don't even have all the information before us.

I would ask that the committee consider delaying the clause-by-clause debate. I can't believe the government has had an opportunity to analyse all the presentations that have been made to this committee around this province.


Mr Phillips: I think there's some merit in Mr Tilson's argument. First, just in terms of timing, as I understand it, Mr Chairman, the House may not be coming back on March 22. It may be delayed a week or so, so you may have some time.

The other thing is that this day we've scheduled for this week was not planned for this week. It was added, as my memory serves me, because of the passing of one of the members. I think we would have had the summary earlier had we not had the day of hearing here, I suspect.

I wonder if the subcommittee could meet and discuss whether there is a way. The sense of urgency may not be there now because the House may be delayed a week or so in coming back. That may give us a chance for a little more sober reflection, a chance to review. I don't know. The government itself may have benefited from the hearings.

Mr Owens: I have never been involved in a committee where there has been such a trail of littered subcommittee agreements that have been broken. When we initially got together, we had agreed on a process whereby we would exchange amendments on February 5. As a result of the passing of Margery Ward, we had to add an additional day. I'm not quite sure why the legislative research person is that far behind. That's not an issue for me to be concerned with. That's between him and his superiors.


Mr Owens: Let me finish.

Mr Tilson: You are out of line.

The Chair: Mr Owens, I --

Mr Owens: Just a second here, Chair: In terms of the request that was made by Mr Mancini in a fax date-stamped February 8, requesting that the exchange of amendments take place on February 12 at 4 o'clock, the Chair and the clerk dutifully canvassed the committee. The government side agreed. Mr Tilson had approached me earlier -- I give Mr Tilson credit for doing that -- indicating there would be some difficulty in his party in terms of producing amendments by whatever date was agreed to.

The problem is that we have an agreement that was reached by the three House leaders with respect to time. The pre-budget consultations that have been scheduled in this committee need to go on so the people of this province can come in and make their views known in terms of the budget preparation. Mr Phillips, I know you have a great interest in that process. My recommendation is that we receive the amendments on the 12th as agreed to.

The Chair: Let me put it this way: As Chair, I'll rule that 4 pm on Friday, the 12th, will be the deadline unless the subcommittee comes up with a choice other than that. We will be meeting in room 1 from 1 to 5 starting on Monday and from 10 to 12 and 2 to 5 on Tuesday, Wednesday and Thursday for clause-by-clause.

Mrs Caplan: A point of order, Mr Chairman, on your ruling: From my experience, there's never been a deadline on when amendments can be tabled. They can be tabled even as the committee is going through clause-by-clause. I would ask that you show us what rule and what rule book you're basing your judgement on. It seems to me it's beyond the power of the Chairman to determine when there will be amendments received.

The Chair: I guess you're correct on that.

Mrs Caplan: Amendments can be put at any time. You can request that they be in by that time.

The Chair: Okay, I'll request it, so the other committee members will be able to read them.

Mrs Caplan: That's a courtesy, but it's just not proper to say there's a deadline for amendments.

The Chair: I'll agree with you on that. Is everyone satisfied now?

Mr Tilson: Mr Chairman, I'll just go on record to say that I'm not satisfied, but I realize that I'm in the minority on this committee and that the parliamentary assistant has spoken and presumably directed his colleagues to support him. It'll be very difficult for the Conservative Party to prepare amendments on Friday, when all of the information that is to be made available to this committee won't be available until Friday. It'll be next to impossible. So I will say to you that we are not all in agreement, but I understand that -

The Chair: Mr Tilson, I have to tell you that the clerk is already set up for the 22nd, 23rd, 24th, 25th and 26th, as regards presenters coming before the committee. It's a little bit of work to try to switch everything around and change all the presenters because they were contacted last week on the dates and time that they would be presenting.

Mr Tilson: What do you mean "presenting"? We're having clause-by-clause. There's no presenting.

The Chair: The following week. You can't delay anything any longer, because of the next event, dealing with the pre-budget consultations.

Mr Phillips: I understand, Chair, but when the schedule was set for the House, I think the House had planned to come back March 22. My understanding is it may be delayed a week, so I'm just saying there may be windows available that weren't before and we hadn't anticipated that the hearings would continue to this time this week.

Mr Owens: One day.

Mr Phillips: The parliamentary assistant says "one day."

Mr Owens: You must be reasonable.

The Chair: You have the floor, Mr Phillips. We're not going to talk back and forth. We're going to adjourn now and the subcommittee can meet to make any other changes; otherwise, everything is the way it is.

Mrs Caplan: Unless, of course, it isn't.

Mr Tilson: And then it could be something else.

The Chair: Thank you.

The committee adjourned at 1727.