Thursday 28 January 1993

Insurance Statute Law Amendment Act, 1993, Bill 164

Canadian Federation of Independent Business

Judith Andrew, director of provincial policy

Jim Bennett, vice-president, legislative affairs

Ontario Federation of Labour

Ken Signoretti, executive vice-president

Duncan MacDonald, programs coordinator

Société de l'assurance automobile du Québec

Claude Gélinas, secrétaire et directeur des services juridiques

Camille Genest, directeur de la programmation et des opérations centrales à la vice-présidence des services aux accidentés

Martin Breton, chef du Service de l'actuariat à la vice-présidence aux finances et administration

Ontario Teachers Insurance Plan

François Tisi, chief executive officer

Randy McGlynn, executive director, marketing and insurance

Canadian Paraplegic Association Ontario

David Byers, executive director

Peter Downs, lawyer

State Farm Mutual Automobile Insurance Co

Cliff Fraser, deputy regional vice-president

Harry Brown, lawyer

Greg Hayward, automobile insurance actuary for Canada

Ontario Chamber of Commerce

Don Eastman, vice-president, policy

Linda Matthews, past president

Associated Canadian Car Rental Operators

Sid Kenmir, executive director

Toronto Taxi Cab Owners and Operators Association

Sikko Wiersma, director

Lawrence Eisenberg, president

United Senior Citizens of Ontario

Alex Mansfield, past president

Jane Leitch, president

John Atto, auto insurance adviser

Coalition of Motorcycle Organizations

Allan Johnson, secretary

Robert Ramsay, Motorcycle and Moped Industry Council

Ann Dagleish

Keith Harris

St Michael's Hospital, Head Injury Team

Sheila MacDonald, speech language pathologist

Irene Sullivan, psychometrist

Steve Ryan

Sal Valela


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

*Acting Chair / Présidente suppléante: Haeck, Christel (St Catharines-Brock 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:

Dadamo, George (Windsor-Sandwich ND) for Mr Wiseman

Haeck, Christel (St Catharines-Brock ND) for Ms Ward

Harnick, Charles (Willowdale PC) for Mr Carr

Jackson, Cameron (Burlington South/-Sud PC) for Mr Sterling

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 Sterling

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

Also taking part / Autres participants et participantes:

Kormos, Peter (Welland-Thorold ND)

Clerk pro tem / Greffier par intérim: Carrozza, Franco

Staff / Personnel: McNaught, Andrew, research officer, Legislative Research Service

The committee met at 1001 in room 151.


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 Chair (Mr Ron Hansen): Good morning. This is the standing committee on finance and economic affairs. We're in day 3 of Bill 164, An Act to amend the Insurance Act and certain other Acts in respect of Automobile Insurance and other Insurance matters.


The Chair: This morning the first group to come before the committee this morning is the Canadian Federation of Independent Business. I'd like to welcome you. We have half an hour, until 10:30. In that half-hour, could you leave some time at the end of your brief for questions from the three caucuses. If you don't mind, identify yourself for the purposes of Hansard and the people of Ontario. You may begin.

Ms Judith Andrew: Thank you, Mr Hansen. My name is Judith Andrew. I'm director of provincial policy with the Canadian Federation of Independent Business. I'm joined by Jim Bennett, who is our vice-president of legislative affairs at the federation.

We appreciate the opportunity to appear before the committee on behalf of our 40,000 small and medium-sized business members in the province of Ontario. Our members are interested in Bill 164, in auto insurance coverage, as both personal and business consumers of insurance products.

The committee should note that the total number of business enterprises in Ontario, including those of the self-employed, amounts to nearly 650,000 operations, of which 98% have fewer than 50 employees and 95% have fewer than 20 employees. Small business in fact is the predominant form of business enterprise in the province.

CFIB members determine direction for the organization, on the basis of their majority votes, on public policy issues contained in our publication Mandate. The most recent vote we've had dealing with auto insurance came in January 1991, when some 64% of our members opposed the concept of publicly owned and operated car insurance. A prior vote going back to 1986 measured our members' views on no-fault auto insurance. The question posed was, are you for or against a no-fault system for auto injury compensation? The result was 63% of our members in favour, 23% against, and some 14% undecided.

We have been gauging the calls and letters we've received recently, and I can say that there has been no widespread call from the small business community to modify greatly the Ontario motorist protection plan. There are many other problems facing the small business community, and this is not one we are contacted about often.

Nevertheless, as the government is about to amend the auto insurance legislation, we will comment on Bill 164 in light of our members' goals for auto insurance. Those are: fair and certain levels of compensation for loss of income; fast and efficient payments to accident victims; reasonable legal and administration costs; affordable premiums; and accountability for drivers' actions. I would say that these goals are not too divergent from the government's own goals for auto insurance.

Just dealing with key elements of Bill 164 -- the new tort restriction, the monetary deductible -- we are of course interested in the predictions on this from the actuaries engaged by the government, William Mercer Ltd. We noted that the Mercer study estimates that the combined effect of the change in access to tort for non-economic damages and the elimination of the right to sue for economic damages is estimated to yield a 15% reduction in the cost of awards and settlements under Bill 64 from the levels of the current OMPP. Yet three times as many people will be able to seek redress from the courts; this means they will be able to seek redress for less.

We are also advised by knowledgeable participants in the insurance industry that the prospect of considerably more claims for pain and suffering will mean a significant increase in administration. This is because every accident now will have to be thoroughly investigated and statements will have to be taken from all those involved, in preparation for a potential tort action. Naturally, the threefold increase in legal suits will also entail a much larger legal expense.

We would also note that there are many unanswered questions concerning how the new rules will play out in court decisions. There is the suggestion that the $15,000 deductible for pain-and-suffering suits will actually become a new floor for those types of claims. In fact, judges would be forced to award more than $15,000 if they intended to actually compensate someone for their pain and suffering. It's also possible that judges could attempt to characterize economic loss as non-economic loss in an effort to more fully recompense those people who cannot sue under the system.

In an overall way, we are very concerned about the lack of fairness in barring legal action for pecuniary loss in the most serious of cases while at the same time allowing many more claimants access to the courts for the less definitive non-economic losses they sustain. Our organization is also concerned about holding administration and legal expenses at reasonable levels, yet Bill 164 threatens to greatly increase those components.

Turning to the structured benefits for economic loss, we note that they are greatly enriched under Bill 164. Our organization has no fundamental objection to periodically reviewing and adjusting the auto insurance benefit structure. In fact, looking at benefit designs can aid in better meeting the needs of insureds within cost limits and impacts which are well understood and affordable.

I would note that there are significant parallels between the auto insurance benefit structure you're examining and that of the Workers' Compensation Board. This should make legislators all the more cautious as you approach the auto insurance benefit schedule in legislation, as the WCB is a prime example of no-fault insurance gone awry.

To digress a moment over the WCB difficulties, legislators will know that the WCB is struggling under an unfunded liability of some $11 billion currently, despite having the highest assessment rates in the country. Employers are the sole funders of this expensive insurance system that takes in some $2.5 billion per annum in premiums. There is an expenditure crisis at the WCB, and the combination of generous benefits, poor administration and the recession have resulted in claimants actually gravitating to the WCB and staying on for much longer periods than previously.

The Mercer study commissioned by the government on the auto insurance estimates that the increase in premiums resulting from the changes will be in the order of 13%. At the other end of the estimate spectrum is an increase of some 20% calculated by Wyatt Co for the insurance industry. Our comment would be that the WCB-esque benefit structure and the administration proposed under Bill 164 makes us very pessimistic on the cost projections.

Just as for WCB claimants, the proposed income replacement benefits at 90% of net income are non-taxable in the auto accident victim's hands. The weekly maximum under auto insurance will be $1,000, which actually exceeds the WCB maximum of $750. It is relatively simple for actuaries to show that replacing income at this high level on a non-taxable basis results in overcompensation where the claim is of less than one year's duration; in fact, overcompensation worsens at higher levels of income. In the case of WCB, some claimants actually receive between 110% and 130% of their pre-injury earnings. In the WCB context, this has emerged as a rather perverse financial disincentive to rehabilitation and return to productive work and living.


A cursory examination of the rules governing entitlement to benefits under the revised draft regulation just given out recently yields some striking parallels to WCB. Of particular interest is draft regulation section 26(4), which sets out the criteria for judging whether the person has made reasonable efforts to obtain employment. The section clarifies that the employment must be available in the area the insured person lives, the employment must be accessible to the person and it is reasonably possible that the person could obtain the employment, having regard to his or her personal characteristics. This very same approach at the WCB has resulted in that agency absorbing a share of general unemployment, as suitable work is not available for many Ontarians, whether or not they were injured. As the rehabilitation task contemplated under auto insurance appears to go beyond making the individual job-ready to actually placing him or her in a job, legislators can anticipate that significant excess costs will arise when unemployment rolls are high.

Accordingly, if the Bill 164 benefit proposals and administration proposals remain unchanged, CFIB would anticipate very significant pressure on auto insurance premiums, and this at a time when our small and medium-sized businesses can ill afford anything more than a nominal increase. We would strongly recommend that the income replacement benefit percentage be modified to take account of the tax effects, and you might want to ask your actuaries to actually look at the various levels of income and the effects on the replacement ratio of this particular benefit design. We would also recommend that the rules governing entitlement be revisited to ensure that the loss of earning capacity is clearly linked to the auto injury and not to the general state of the economy.

I'd just like to conclude with a few comments on the coverage gap for smaller businesses. With respect to the OMPP, CFIB was critical of that plan for failing to take account of the special circumstances of small business entrepreneurs.

We do note that the revised draft regulation issued January 1993 contemplates the situation of small business owner-operators. The definition of employment actually includes them. Section 62 of the regulation establishes a method for calculating income from self-employment, and section 63 permits the small business entrepreneur to actually contract in advance with the insurance company for a weekly income amount appropriate to the business situation.

The section 62 calculation of income is still deficient, in our view, as the entrepreneur actually needs an amount which approximates his or her business cash flow. If the business is to continue, all the usual expenses have to be paid, and naturally the banks and others won't forgo amounts owed to them. Calculating the benefits on adjusted net income unfairly assumes that the money to pay those business expenses will continue to flow in from somewhere. If the entrepreneur is actually pivotal to generating the cash flow to the business and he or she is unable to work, auto insurance benefits must make up the shortfall.

We do see the section 63 provision, which permits the entrepreneur to contract with the insurance company for a particular level of coverage in advance, as a positive step. We're keen to understand how this provision will actually be applied in practice by the insurance companies, and we would be pleased to consult further with the government and the industry on this particular matter.

In summary, while we find the recent draft regulations an improvement with regard to the treatment of the self-employed, we still have several serious concerns about Bill 164. Our members' goals for auto insurance are simply not met in terms of Bill 164. They don't even come close.

Specifically, the $15,000 monetary threshold for tort action seems to run the risk of becoming the floor for pain-and-suffering claims, as well as driving up premium costs and legal and administrative expenses. The enhanced structure of benefits for economic loss is simply too rich and likely to become as unsustainable as WCB benefits. In fact, our contacts in and about the WCB indicate that there has been major discussion in terms of the development of this particular benefit structure vis-à-vis the WCB, and that gives us great concern.

Finally, I would say that as there is no proactive demand for changes to the OMPP in the small business community, any new system which significantly increases auto insurance premiums will be met with strong resistance and will become another serious source of irritation between the provinces, government and owners of small firms.

The Chair: I know my wife will be listening this morning; she's a member of your association. She can be a bigger critic than Mr Mancini, and you're up.

Mr Remo Mancini (Essex South): You've said many of the things this morning that I've been saying all week long; that is, that the government has taken the 18 pages of regulations which were attached to the Ontario motorist protection plan, which were generally considered to be user-friendly, and turned them into 68 pages of unintelligible bureaucratese.


Mr Mancini: As you can see, the government has felt the wrath of many people this week, so they constantly interject when other members are making points. We'll just have to ignore them as we're going through this process.

The point about economic loss being taken away -- a right being taken away from people -- has also been made by other groups before this committee. I don't know what the average income of a small business owner is, but I can tell you this, and I'd like your opinion on it: If a small business owner supporting a family, earning approximately $35,000 a year, was killed in an automobile accident, his family would receive $120,000 and that's it, that would be the extent of it. Because the right to sue for economic loss has been taken away by the NDP, I believe the families of many, many thousands of small business owners may be put at great financial disadvantage. I was wondering if your association was aware of the effect of this change and how you feel about this change.

Ms Andrew: Yes. We said in our brief that we are concerned about the fact that people who sustain economic loss are not entitled to sue, and that would include the families of someone who's actually killed in an auto crash. That very serious situation is simply not going to be dealt with fairly; meanwhile, many other very small claims will go forward to the courts.

The average small business person, incidentally, earns something like $29,000; it's not a princely sum. But if anyone were earning more than the ceiling, his or her family would be left, no question.

Mr Jim Bennett: Mr Mancini, the difficulty we tried to point out in terms of section 62 and section 63 of the regulations, what was covered and what was not, is compounded by the fact that you can't sue for economic loss. So in the case of most of the small firms that you're talking about, that have significant bank loans, have equipment their estate would be lucky to get 10 cents on the dollar for if they had to liquidate, are not covered because they can't sue for economic loss and are not covered adequately under the provisions of section 62 and section 63. So there is a gap there, and that's one of the gaps that Judith was mentioning.

Mr Mancini: We're beginning to find out that possibly factory workers and small business owners are the ones who are going to be hurt the most by this legislation. They're going to be given the right to sue for non-economic loss, but the disadvantage of that is that they're losing the right to sue for economic loss, and the benefits there would be far greater, as all witnesses have stated on the record.


You're aware, I would think, probably more than anyone else in this room -- including the government members, who know a great deal about things that are going on -- how difficult this recession has been, not only on small business owners but on the employees of those firms. We have been told by Mercer, the government's hired consultants, that they foresee Bill 164 costing policyholders 4.5% more, minimum. If you factor that out through the Ontario economy, that's slightly less than $200 million. That's a $200-million regressive tax --

The Chair: Thirty seconds left.

Mr Mancini: -- being placed on policyholders who have not asked for Bill 164. And that's the minimum; we're not talking about the maximum, which could be $600 million. Do you think that at this time the economy could sustain another $200-million to $600-million tax?

Ms Andrew: Absolutely not. We believe that the estimates are perhaps understated, given the WCB-esque benefit structure that's contemplated here. You can't overemphasize what a dreadful financial situation the WCB is in, and it's dealing with the same kinds of rules; in fact, a slightly less generous benefit structure. When the economic times are difficult, it will be a situation where people can't find jobs and end up staying on auto insurance. The loss costs may in fact end up being more than the Mercer actuaries predicted, in which case that has to translate into premium increases that people simply can't afford to pay.

The Chair: Thank you. Mr Tilson.

Mr David Tilson (Dufferin-Peel): I appreciate you coming and giving your thoughts from the independent business position, because I think this legislation -- and I hope it wasn't intentional, because much of the legislation that's gone on in this place since this government has taken power has been against business and has been against independent business, the small business person.

Many small business owners, as you know, them don't draw a very large salary. They put their money back into the capital of their firm, so their earnings form part of the capital of their firm. Therefore, the whole principle of compensation contemplated under this legislation really isn't fair to the small business person, because compensation is based solely on their drawings, which are minimal. They can't survive if they don't keep pouring money back into their businesses, so that compensation, as this bill has been designed -- I'd be interested in hearing your thoughts on that -- is really unfair, because a small business person simply can't take the salary that one who works for a large company would see. That's just not the way the system works. I think that's the problem with this government: It simply doesn't understand how the economics of this province work. Could you comment on that?

Ms Andrew: That's correct. There's absolutely no question that small business owners often don't draw a large salary. Either the business is new and they're busy plowing profits back into the business to help it grow, or they're in a period of reinvestment and simply aren't taking a large salary.

Section 62 specifies an adjusted profit calculation as the basis for the income benefits, but roughly half of business corporations in the province in any given year actually don't earn profits. That's not because they're not viable, ongoing businesses. It's quite simply that they're in a period of reinvestment and so on.

So the notion of calculating the benefits based on that adjusted profit base will not do the job. What the small business entrepreneur needs is something closer to the cash flow he or she was generating by being a pivotal, vital part of that business, actually bringing in that cash flow. If they're not able to work and that cash flow doesn't come in, they're going to be in very dire straits indeed.

Mr Tilson: I think the problem with this legislation, like so much of the NDP's legislation, is that we're all the same: We're all making the same or our abilities are the same; there's no chance for improvement. I mean, the entrepreneur is going to expand his business even if he's taking out a draw, but they're assuming that he or she is going to stay the same.

The other issue I'd like you comments on deals strictly with the independent entrepreneur. If that person is involved in an automobile accident and isn't able to carry on his or her business, there's no compensation. In other words, they simply go out of business. Hence, you could have that person plus his or her family on welfare and all the social services this government has lost complete control of.

Ms Andrew: That is a possible scenario. Mind you, section 63 does allow that pre-arranged contract with the insurance company, which is a beneficial step. But again, we still don't know what application procedures will be in place by the insurance companies, what rules they'll use to decide what level of coverage that individual can buy.

Mr Tilson: It's one more add-on cost to the entrepreneur.

Ms Andrew: And it's an add-on cost, absolutely.

Mr Tilson: The average person doesn't have that, but the entrepreneur does it, and it's more anti-business. I believe Mr Harnick has a question.

The Chair: I'm sorry, but you've run out of time. Mr Klopp.

Mr Paul Klopp (Huron): Thank you very much for coming today and bringing your brief. A couple of points: I think you hit it very well, that companies, individuals, independent business people don't really question their auto insurance very much until the day they have an accident. That is what we have found and why we have taken on reviewing the OMPP and going to Bill 164, because people, not only entrepreneurs, have found out they're not adequately covered under the present system. That's why over the last year and a half the minister has consulted with the Insurance Bureau of Canada and people like yourselves, asking individuals and companies to come forth and bring up ideas. This is part of the process today.

You mentioned section 63. That was put there especially because under the present system, if you get in an accident today and you're paying a premium, you'll find you're not adequately covered. Do you not think this is a far better step than the present system we're under right now?

Ms Andrew: We acknowledge that that is an improvement, no question. We have no fundamental objection to looking at the benefit structure and looking for gaps and dealing with those gaps, and that's what your government has done. But that's got to be done with an eye to affordability, legal and administration costs and all those other things.

The effect of adopting a WCB type of benefit structure, with the benefits non-taxable in the individual's hands, will actually yield overcompensation for some people. That's why we're recommending that you revisit the benefit structure and ask the actuaries to do some of these calculations on replacement ratios: to see whether that is an appropriate level of benefits to be recommending under Bill 164.

The small business issue has been somewhat covered, but the individual needs more in the line of cash flow replacement rather than net profit or income replacement. It's still not clear exactly what will be available to that individual, and obviously it's going to be an extra expense to have to purchase that coverage under section 63. Extra insurance costs are simply not absorbable in this climate. Small and medium-sized businesses have really had a struggle in the last couple of years, and they can't accept anything more than a nominal increase. So we need to look at the benefits structure in light of the costs that's going to entail.


Mr Klopp: The one point about the benefit if you're being paid if you get in an accident: 90% of net has been changed from 80% of gross. That was one of the things Mercer looked at. As you pointed out, every person's individual income tax is a bit of hindsight and putting into the future to a short extent. But for the short term, say I get in an accident tomorrow morning; this can be based on my income tax of last year. As I am an independent person, a farmer, this present system really put me in very bad straits. I really had to make sure I had other insurance, compared to even the old system if I won my tort case -- if I won, that is. So for the short term, maybe the first year, you may get a little bit more than you would have if you'd been in the workforce. However, if you were unfortunate and stayed in the system longer and didn't get rehabilitated -- which we hope you could -- and get back into your business, then you will not be overcompensated, according to Mr Mercer. In fact, Mr Mercer looked at it.

The Chair: Do you want to wind it up?

Mr Klopp: I think a colleague said it was 4.4% of the loss cost. So these are things we have been looking at.

Ms Andrew: That's correct. The overcompensation takes place in the first year.

Mr Klopp: It may.

Ms Andrew: It does. It takes place in the first year, and it peaks at roughly the six-month point. The reason is that the individual's marginal tax rate is lower, because half of what they're getting is non-taxable.

The Chair: Jim, you were nodding there and agreeing, but the camera wasn't on you and Hansard doesn't pick you up. If you ever reply again, always say yes or no, okay?

Mr Mancini: Or maybe.

The Chair: Or maybe. Did you want to say something, Jim?

Mr Bennett: I'd just like to have one final word, if I could. For the benefit of some of the members who weren't here in 1986, this province faced, at that point, a liability insurance crisis, where premiums were soaring and businesses could not get insurance. We think the benefit level is generous to the point where you're going to face something similar. Insurance costs are one more element that businesses look at when they're making decisions on where they locate. We already are at a significant disadvantage in terms of tax rates, in terms of some of the other neighbouring jurisdictions. Be careful what you do here, that you don't make it so rich that it's another reason to locate part or all of your business outside the province.

The Chair: Thank you, Jim and Judith, for coming before this committee.

Ms Andrew: Thank you. We appreciate the opportunity.


The Chair: The next group we have is the Ontario Federation of Labour. Would you come forward, please. I'd like to welcome you before the standing committee on finance and economics. You can get a glass of water. We've got ice cubes back in today; yesterday, it was so cold in here, we took the ice cubes out to keep warm.

We have one half-hour, until 11 o'clock. In that time, could you leave some time at the end for questions from the three caucuses? We'll start off with the Conservative caucus, with Mr Tilson, as soon as you're done.

Mr Ken Signoretti: My name is Ken Signoretti, executive vice-president, and Duncan MacDonald is the programs coordinator. I guess you have our brief, and rather than just sitting and reading it, I'd like to just make some specific comments to some issues.

First of all, I would like to say that the Ontario Federation of Labour, and the labour movement as a whole, has been in favour of public automobile insurance for some time. As a matter of fact, our policy was struck at the 1961 convention. Our membership has supported that, continued to support that and still does support it. The Ontario Federation of Labour would at some point in time like to see public automobile insurance.

Having said that, there are a couple of other things we see within Bill 164 that were in Bill 68 and have not been removed that give us great concern. The biggest one, I suppose, is the issue of collateral benefits. If you looked at our brief in 1990 on Bill 68, we had a great deal of concern about the issue of collateral benefits, with the sick benefit plans and the long-term disability being the first payer as opposed to being the last payer.

The auto insurers, we believe, should not have the luxury of having that benefit with that policy. It does a couple of things. One -- and we've outlined a number of numbers in our brief -- is that it puts added pressure when a union goes into negotiations, and I suppose it puts added pressure on people even within the small business community, who don't have a union, because these plans were primarily designed for sickness and health, these plans were designed for long-term disability, and by having them pay first as opposed to the auto insurers, it really distorts the whole question.

I guess those are two of the biggest concerns we have as a federation. But having said that, if you look at the draft legislation as it is, we are in support of a number of things. We are in support primarily because, first of all, what it actually does is that I believe 98% as opposed to 91% are now being covered under the plan, and the maximum is now raised to $1,000 as opposed to the $600 it was before under Bill 68. These are all positive plans and these are all positive positions, and we support that.

It's extremely important for workers. I just want to allude to something the CFIB mentioned when it talked about the difficulty in the bill for small business and small employers. Workers have a great many problems too; small business people are not the only ones who are struggling. The problem is that workers are struggling, and I think this plan really extends the coverage and gives us something in terms of workers, in terms of how they do things. We believe it's really important that Bill 164 goes through. We believe that it will be beneficial to the people we represent, in the main. With some of the faults, our position, we would like to say, is that we support Bill 164.

One thing I would like to add just in closing: I agree with the CFIB to a certain degree about the problems within workers' compensation. There are problems. Mind you, the problems we see are different from the problems they see, but collectively there is a problem. One of the things that has been happening in the last number of months, particularly when the committee went out on hearings about stress-related incidents, is that one of the things being more talked about, even within the employer community, is that there should be a royal commission with an all-encompassing structure which takes -- well, it might even look at auto insurance.

I'm not suggesting for one moment that that's the answer, the panacea for everything. There are problems within that, but maybe collectively within all of those problems we might find some kind of solution. I just want to add that the briefs that were coming from the employer community were that they would probably welcome at least some discussion around the issue. I know there's been talk about a royal commission within that process, and maybe the time has come that we should look at all of these things in an encompassing way. Those are my remarks, Mr Chairman, and I welcome any questions, unless Duncan has anything to add.

The Chair: Mr Harnick.

Mr Charles Harnick (Willowdale): Sir, I'm a little bit confused, because I notice at the opening of your presentation, early on in your paper, you state that you were disappointed that the government didn't keep its promise and institute a public auto scheme. What I'm confused about is how, on that premise, you can support this bill.

Mr Signoretti: Because it increases some of the things we were looking at: increasing the minimum of $600 to $1,000, and there's a certain portion now of the right to sue. All of these things are an improvement within the bill. That's the reason we support it.


Mr Harnick: Let's deal with that, then. Do you know that if a 35-year-old worker who has two kids and a spouse is killed in an accident and happens to be making $35,000 a year, after he or she is dead and buried, the surviving spouse and children of the breadwinner who has been lost will receive the grand total of $117,000 for the rest of their lives? How can $117,000 support this family for ever? Can you possibly be in favour of a scheme that so blatantly hurts a worker's family and a worker's protection?

Mr Signoretti: But as I understand it --

Mr Harnick: Tell the 35-year-old union people out there who are watching how you like this bill now.

Mr Signoretti: That's why we're here. We support it. We think it's a bill that will go some way to addressing some of the problems that happened under Bill 68. I think that's the issue here.

Mr Harnick: May I tell you that under Bill 68 and under the previous auto legislation before that, this 35-year-old worker would have received $700,000? His family would have been supported instead of living at the poverty line.

Mr Signoretti: But we don't see that in here.

Mr Harnick: Are you going to tell me that you're sanctioning and telling --

The Chair: Mr Harnick --

Mr Harnick: Excuse me. Do you mind if I finish my question?

The Chair: Mr Harnick, can we use a different tone? He is not on trial.

Mr Harnick: I'll ask the question.

The Chair: Ask your question, but --


Mr Tilson: You can't say what tone he can use.

Mr Harnick: I'll ask the question any way I want, Mr Hansen. You can sit there and be quiet like everybody else in here should.

Mr Tilson: You're dead wrong. You have no right to say what his tone is or isn't.

Mr Harnick: Can I carry on, please?

The Chair: Go ahead, Mr Harnick.

Mr Harnick: Sir, are you sanctioning a plan that will provide for a family, after a fatality, what amounts to three years' protection, and that's all, and you're going to leave that family to the welfare rolls? Is that what you're sanctioning here, or are you are you prepared --

Mr Signoretti: We are sanctioning --

Mr Harnick: Let me finish. Or are you prepared to admit that this bill has some very serious deficiencies and it should be re-examined?

Mr Signoretti: Yes, we're prepared to admit that probably there should have been public automobile insurance in the first place, but we're also saying to you that this bill goes a great deal better than what Bill 68 was, and that's the importance for us.

Mr Harnick: Bill 68 would pay this family $700,000. Bill 164 goes to pay at $117,000.

Mr Signoretti: Just a moment. We can talk in abstract --

The Chair: Can I say --

Mr Signoretti: Now it's my turn.

The Chair: Okay, go ahead.

Mr Signoretti: We can talk in abstract about what it does and what it's supposed to do. I've negotiated a lot of collective agreements over my lifetime that were supposed to do a lot of things that they didn't do. I don't want to sit here and take a hypothetical situation of what might or might not happen. That's the problem we've got, Mr Harnick. The issue with this bill is that it addresses some of the issues that we're concerned with. It doesn't address all of them, and I'm saying that to you.

Mr Harnick: Let me tell you this: If you negotiated a contract on behalf of your union members that would pay a member this kind of money after a family's suffered an actual economic loss, I'll tell you, that union would have you out on your ass so fast, you wouldn't be able to blink.

Mr Signoretti: But I also don't want to go in front of the membership and say, "You're going to get a certain amount of money," when you know in fact that they may or may not get that money. That's the problem.

Mr Tilson: We know they're not going to get that money. That's the problem.

Mr Signoretti: They know they're not going to get the $700,000. That's the problem.

Mr Harnick: Pardon me? An innocent victim is not going to get the $700,000?

Mr Signoretti: You don't have to turn this into a shouting match. If you want to ask me a question, ask me a question.

The Chair: It's easier for Hansard if one person at a time is speaking, so we can get both conversations. Have you got a question, Mr Harnick?

Mr Harnick: Do I have any time left?

The Chair: You've got about two minutes.

Mr Harnick: Then I have a question. Are you going to tell me that the official position of the OFL is to sanction a scheme that is going to allow injured workers to suffer an economic loss beyond what accident benefits are going to pay them?

Mr Signoretti: No. What I'm saying to you is that the Ontario Federation of Labour is sanctioning a scheme that's better than what was before, but not as good as we'd like to have it.

Mr Harnick: Are you saying we can't go ahead and ask the government to make it even better?

Mr Signoretti: Sure, go ahead and do that.

Mr Harnick: Well, what I'm asking you --

Mr Signoretti: Ask them, if it's going to make it better. We have no problem with that.

Mr Harnick: What I'm asking you, if you'll listen to my question, is whether it's right that we have a scheme that pays people less than their actual economic loss. Are you saying the position of the federation of labour is to accept less than what your actual economic loss is if you're the innocent victim in an accident?

Mr Signoretti: And I'm saying to you that you don't know that that's going to happen.

Mr Harnick: Well, I sure hope they find somebody better to represent workers than your organization.

The Chair: That's his opinion.

Mr Signoretti: Well, there's an election in November. I might not be here. Who knows?

Mr Harnick: Well, I sure hope your members heard your answers today.

The Chair: We'll go on to Ms Haeck.

Ms Christel Haeck (St Catharines-Brock): Thank you, Mr Signoretti, and it's nice to see Duncan MacDonald again. Thank you, Charles, for your two cents worth.

I have to concur with you, from my personal experience in what's happened in my own constituency office and comments I've heard from accident victims. This is sort of a long preamble, but the situation is that one woman -- she and her husband were facing loss of their home because the lawyers for the insurance company couldn't get together to figure out who really was at fault for the accident and who was going to be the payer as a result of this accident. Her husband was running out of his unemployment insurance and, because of the accident, she was also injured and not able to do the work that she previously had done. As I say, they were about to lose their home. Three years after the accident, and they'd seen nothing, hadn't even gotten to the discovery stage.

I hear the bombast from Mr Harnick with regard to $700,000 being given to a victim, and I think you and I would have to concur that the tort system is strictly a lottery and doesn't pay out these kinds of awards. In your experience, in your research, either one of you, have you actually seen these kinds of awards coming to workers?

Mr Signoretti: Not very many. There's a couple of things of here. First, the average worker can't afford to hire a lawyer --

Ms Haeck: Like Mr Harnick, who's still running his practice.

Mr Signoretti: -- can't afford to hire a lawyer and get into long legal costs to fight it. That's the first thing. Second, my experience has been that it just does not happen. Duncan might have something to add to that.

Mr Duncan MacDonald: I think you mentioned, and it was in The Road Ahead as well, that it was a bit of shooting the dice, to quote a politician at another level. There may be some people who "win." What we're looking at is a system that is fair to the vast majority of people, that if there is a need, you get the benefit you deserve.

Ms Haeck: I come from a union background myself, which I know some people around this table might find offensive. The reality is that as workers working on behalf of workers, what we have tried to institute in this legislation is seeing rehabilitation recognized as something that is needed right at the onset in making sure that people actually do get back to work in a timely fashion and are productive members of society. I would suggest, from everything you've said and what I have been able to read in your presentation, that you would heartily concur with that.

Mr Signoretti: We do.


Mr David Winninger (London South): Do we have time for a supplementary question?

The Chair: Yes.

Mr Winninger: Mr Harnick put forward perhaps one of the worst-case scenarios, where the 35-year old worker is killed. First of all, I don't believe that ordinary workers have been that well served by the tort system in the past. First of all, they may not have had the means and resources to retain counsel to pursue litigation. Second, during the four or five years it would take to bring litigation to a conclusion, often their wives and families would suffer the penury of not having adequate benefits.

And let's say the 35-year old worker did have the resources to hire a lawyer and take it to court. If the accident victim happened to be at fault, then that award would be reduced: it might be 25%, it might be 50%, it might be 100%. Just because the deceased happened to make some fractional error in judgement and was found to be the perpetrator of the accident, it would mean his surviving family would be out in the cold completely. So I think you might agree with me that having a fairly adequate benefit package helps to avoid some of the pitfalls that ordinary workers found themselves in under the former tort system.

Mr Signoretti: One of the things we have found has been my experience over the years, or if you talk to most people who are active in the labour movement. I think that's really what workers look for, that kind of thing. The fact of the matter, as you said, Mr Winninger, is that most of them just can't afford lawyers to get into long legal costs, and when they do, they usually wind up being the loser in the whole thing.

Mr Winninger: And in the kind of case Mr Harnick cited, they might have life insurance available privately or through work and other death benefits.

Mr Signoretti: I've heard that one before too, about all these wonderful things they can have -- that they usually don't get, though.

Mr Duncan MacDonald: There's just a slight point I wanted to make about that. In our brief we pointed out we have been long-term supporters of public car insurance. When the government made the decision we told them, "We think you're wrong," and, as with any government, it will suffer the political benefits or consequences of its actions.

We approach Bill 164 in that context. The government said, "We are putting forward these proposals." We do not believe this should be the final word on car insurance. There are some things in it that we think are an improvement to the present situation. It was in that same spirit that we made our presentation under the previous government with its Bill 68. We said, "Here are some of our concerns." You either say you're part of the process or not. The fact that we're here today is not that we're suggesting this is the best possible legislation in the entire world. That's why we're having these hearings and, hopefully, improvements will come out of it.

The minister, in his remarks in December when he introduced this, said it was the beginning of a process, not the end of the process, so it is in that spirit that we're here today. There are things in here that we think will improve the situation for the people of Ontario; there are other things we think the government should have looked at and would hope it looks at at a future time.

The Chair: One minute, Mr Owens. Quick.

Mr Stephen Owens (Scarborough Centre): Very quick. There have been some comments back and forth about the quality of representation that the OFL may be or may not be providing for its membership. In my view, in looking for representation, I would certainly be looking for a group that would be looking at my long-term needs to provide stabilized benefits. I don't think I would be looking for a representative, whether it's through the OFL or private counsel, a person who's still involved in the personal injury bar, to make a decision for me --

The Chair: Mr Owens, a question?

Mr Owens: -- that I should get involved in litigation that may or may not give me $700,000. Is that the kind of representative you would choose as your counsel?

Mr Duncan MacDonald: No question.

The Chair: Mr Mancini, seven minutes.

Mr Mancini: Mr Signoretti, thank you for coming before the committee; I appreciate your brief. I also appreciate the criticisms you have made in your brief in regard to Bill 164.

I have some questions about benefits, economic loss, costs and a number of other things.

It has been established by the government consultant, Mercer associates, that Bill 164 will cost consumers more money. So we don't get into an argument or interruptions from government members, I want to deal only with the government's own statistics and the bill as it now stands.

You know and I know that Bill 164 removes the right to sue for economic loss. You know and I know that Mel Swart, the former MPP for Welland-Thorold, was here yesterday. He claimed in his brief to the committee that removing the right to sue for economic loss and replacing it with the right to sue for non-economic loss with the $15,000 deductible, according to Mr Swart's own words, in fact reduces benefits to accident victims by 15%. Those are all facts on the record.

We go back to Mr Mercer, who says rates will go up 4.5%. We extrapolate that across the province and that's nearly $200 million. Your members are suffering through one of the longest and most severe recessions we've had since the Great Depression. Many of them are out of work. They have to keep their automobiles so they can look for work, obtain work and go to work, even if times are tough. You're aware of that. These people will pay more for their automobile insurance. Mr Swart says, and we agree with Mr Swart, that they will get less in return. Do you think these modest changes giving access to tort for non-economic loss are worth the increase in premiums that your many thousands of members will have to pay, the almost $200 million, Mr Signoretti?

Mr Signoretti: First of all, let me say that I have a great deal of respect for Mr Swart, and that's all I can say. I'm not here to quarrel with him. The only thing I can say to you is what we are hearing from our people in terms of automobile insurance: One, you're absolutely correct, and Duncan alluded to it, is that everybody would have liked to have had public automobile insurance. It's not there, so what do you do?

One of the concerns they had was the amount of money they're getting now under the present plan. This will improve that. If it's a modest improvement, it's a modest improvement. I don't know what the word "modest" really means. All I know is that from our membership, they're content that there will be changes and that they will be better protected if in fact they get into an automobile accident.

On the question of rate increases, everybody is going to get mad at every rate increase that ever comes up. I don't know how you deal with that. All I know is what we hear, that, "We're not happy with the scheme as a whole, but yes, the changes basically are good for us, and we appreciate that."

Mr Mancini: Are your members aware that they will be receiving 15% less in benefits from that pie?

Mr Signoretti: But I don't know that.

Mr Mancini: I'm using Mr Swart's figures so that the government members can't accuse me of fabricating anything. I want to use figures that people who are respected are using, and I want to ask you these questions because your presence before this committee is important.

Ms Haeck: Mel said it was an improvement.

Mr Gerry Phillips (Scarborough-Agincourt): Mel said he wouldn't do it.

Mr Signoretti: I don't know what Mel said.


The Chair: Mr Mancini has the floor. Sir, go right ahead.

Mr Signoretti: I don't know what Mel said.

Mr Mancini: I'll give you a copy.

Mr Signoretti: Fine. That doesn't help me now. I don't know what Mel said. All I'm saying to you is that if, over the lifetime, our workers get a better increase, that's what the issue is here. We can't deal with some hypothetical. You're trying to deal in the same way, Mr Mancini, with some hypothetical situation that Mr Harnick deals with: that way out there they're going to get this or they're going to get that. We can't deal with that.

Mr Mancini: Okay, Mr Signoretti, let's not deal with the hypothetical. Let's not deal with the facts that --

Mr Signoretti: You're doing that.

Mr Mancini: Okay, let's try it another way. Let's put some more facts on the record. When the NDP were in opposition, it proposed government-owned automobile insurance with full tort rights. Is that correct?

Mr Signoretti: That's right.

Mr Mancini: To sue for both economic loss and non-economic loss.

Mr Signoretti: That's right; absolutely. That's my understanding, yes.


Mr Mancini: Those are facts. Today we hear from Ms Haeck, and I quote her exactly, "Suing for economic loss is strictly a lottery." Well, it wasn't a lottery before, but it's a lottery today. Mr Winninger says, and I quote his exact words, "not well served by tort."

I'm having great difficulty because, on the one hand, I remember many speeches saying, "We need government-owned automobile insurance with full rights to tort." It wasn't a lottery then; people were well served by it then. Now all of a sudden we're not going to be well served.

I'd like to know your opinion on tort. If you were able to convince the government to introduce government-owned automobile insurance, would your members like to have the full right to tort?

Mr Signoretti: I don't know that at this point. I really don't.

The Chair: Mr Mancini, time has run out.

Mr Mancini: Mr Chairman, time has not run out. I started at 10:58. It's not 11:05 yet.

Mr Klopp: Are you challenging the Chair?

Mr Mancini: Yes, I am.

The Chair: I have watched exactly, and it's 11 o'clock by my watch here. On your Mickey Mouse watch, maybe the arms are in a different spot. I'm sorry. I have the time right here, 11 o'clock, and I divided the time, seven minutes apiece.

Mr Mancini: Mr Chairman, on a point of order: I appreciate your timekeeping, and if your timekeeping is different than mine, then I will accept your ruling, but I don't think I have to accept any of the insults that you directed in my --

The Chair: I'm sorry I made that one statement.

Mr Mancini: Mr Chairman, I'm not finished. I'm surprised that you, of all people, would make such comments. I've been trying to elicit, from the guests we have here this morning, important facts, trying to establish a base for these facts. For you to make those comments is a slur on everything I've said this morning, and I resent it deeply.

The Chair: I have a good friend who paid over $300 for a Mickey Mouse watch, so it's a common watch around here.

Gentlemen, I'd like to thank you for appearing before this committee and for your input into this bill. Thank you.


The Chair: The next group is the society of automobile insurance of Quebec. Would you come forward, please. I'd like to welcome you before the standing committee on finance and economic affairs. I'm sorry; I'm not bilingual. We do have interpreters here for any of the members who need them. I've asked Franco to leave these machines here because we've had some trouble hearing some of the presenters; maybe we'll leave them for the rest of the day. You can turn to channel 1 for the English translation. As I say, it's been a little noisy here, and that's why we need these. Go right ahead, and welcome to the standing committee on finance and economic affairs.

M. Claude Gélinas : Monsieur le Président, mesdames et messieurs les députés, je me présente. Mon nom est Claude Gélinas. Je suis le secrétaire de la Société de l'assurance automobile du Québec et le directeur des services juridiques de la Société.

Je suis accompagné aujourd'hui de M. Camille Genest, qui est le directeur de la programmation et des opérations centrales à la vice-présidence des services aux accidentés à la Société, ainsi que de M. Martin Breton, qui est le chef du Service de l'actuariat à la vice-présidence aux finances et administration, toujours à la Société.

Je voudrais simplement faire comme remarque de départ que nous avons accepté l'invitation d'être ici ce matin pour vous fournir des renseignements et de l'information sur le fonctionnement, l'administration et le fondement même du Régime d'assurance automobile du Québec tel qu'il fonctionne, et que nos remarques ce matin se limiteront au fonctionnement du système tel qu'il existe au Québec.

Je donne la parole maintenant à M. Camille Genest.

M. Camille Genest : Monsieur le Président, à l'invitation du ministère ontarien des Institutions financières, la Société de l'assurance automobile du Québec est heureuse de pouvoir contribuer à la réflexion qu'effectuent les parlementaires de l'Assemblée législative au sujet de l'assurance-automobile.

Déjà, le 4 mai 1989, des représentants de la Société soumettaient à la Commission de l'assurance automobile de l'Ontario un mémoire décrivant le Régime d'assurance automobile du Québec. Aussi, un avis fut présenté par la Société de l'assurance automobile du Québec au Comité permanent de l'Assemblée législative de l'Ontario, le 7 février 1990. Cet avis contenait un historique du régime québécois, un exposé de la législation en vigueur, des données relatives à l'assurance sans égard à la faute et à la relation à établir avec le nombre d'accidents, ainsi qu'une réflexion sur la contribution de la réforme du système d'assurance-automobile du Québec à la prévention des accidents. Nous avons également eu le plaisir et l'honneur de recevoir un certain nombre de missions de fonctionnaires de l'Ontario chargées de préparer les réformes gouvernementales en matière d'assurance-automobile.

À titre de contribution à l'examen des questions d'assurance-automobile effectué par l'Assemblée législative de l'Ontario, nous vous proposons d'effectuer une revue de la couverture du Régime d'assurance automobile du Québec. Cette revue traitera de l'admissibilité, de l'indemnité de remplacement du revenu, de l'indemnité de décès, de l'indemnité pour dommages non pécuniaires, de la réadaptation et du remboursement de certains frais, y compris les frais généraux et ceux d'aide personnelle.

L'essentiel de la réforme québécoise : Au tournant des années 70, il était devenu évident que la situation de l'assurance-automobile au Québec nécessitait un virage important. Les coûts ne cessaient d'augmenter et de nombreuses victimes d'accidents de la route étaient sans protection. Face à cet état de fait, le gouvernement du Québec créait, le 5 mai 1971, le Comité d'étude relatif à l'assurance automobile, dont le mandat consistait à identifier les causes de la hausse des coûts de l'assurance et à proposer des moyens pour indemniser les victimes d'accidents au meilleur coût possible pour la collectivité. Le Comité déposait, en 1974, un document connu sous le nom de Rapport Gauvin, du nom de son auteur, qui critiquait sévèrement le système d'indemnisation alors en vigueur.

Ce rapport révélait notamment qu'au Québec, une personne blessée sur quatre, 28 %, ne touchait pas de compensation, et parmi celles qui étaient indemnisées, bon nombre ne l'étaient que partiellement. De fait, près de 40 % de la perte économique encourue par les victimes non responsables n'était pas compensée et les délais de paiement étaient très longs. Le quart des victimes de dommages corporels n'étaient pas encore indemnisées après 18 mois. En outre, plus le montant de la réclamation était élevé, plus le délai entre la date de l'accident et le règlement final s'allongeait.

L'application de la notion de faute pour les dommages corporels engendrait parfois de longues enquêtes pour démontrer la responsabilité des fautifs. Ce principe d'établissement de la responsabilité empêchait l'indemnisation totale ou partielle de plusieurs victimes. Celles-ci, en effet, pouvaient voir leur requête contestée devant les tribunaux par les supposés fautifs et subir de très lourds délais dans le jugement, en plus d'encourir des frais judiciaires importants. Dans tous les cas, les victimes tenues responsables n'étaient pas indemnisées ni, par conséquent, leurs personnes à charge. Pire encore, lorsque l'auteur de l'accident était inconnu ou insolvable, l'indemnisation de ses victimes était compromise. Enfin, le montant de l'indemnisation, une fois fixé, ne pouvait plus être réévalué. L'indemnisation accordée pour le remplacement du revenu ne tenait pas compte de facteurs tels que l'inflation, l'augmentation du coût des biens et des services, les prélèvements fiscaux etc.


Devant un tel bilan, le gouvernement institua une commission parlementaire et procéda à une consultation populaire dans toutes les régions du Québec. Finalement, en 1977, la Loi constituant la Société de l'assurance automobile du Québec fut adoptée.

Selon son mandat, la Société de l'assurance automobile du Québec doit : indemniser toutes les victimes d'accidents d'automobile sans égard à la faute ; réduire le coût d'utilisation de l'assurance-automobile et retourner aux assurés une plus grande part de leurs contributions ; couvrir les pertes réelles, et cela en diminuant les délais d'indemnisation ; introduire la pleine revalorisation annuelle des indemnités. Ces objectifs n'auraient pu être atteints, du moins en partie, sans la création d'un régime public. Le gouvernement a opté pour la mise en place d'un tel régime afin de réaliser des économies d'échelle et pour s'assurer que tous les efforts en matière de réadaptation et de promotion de la sécurité routière seraient faits.

Par ailleurs, ce nouvel organisme ne pouvait compter sur les impôts payés par les citoyens pour assumer l'indemnisation des dommages corporels des victimes de la route. Au contraire, la Société est, depuis sa création, un organisme financièrement autonome qui a la responsabilité de percevoir ses propres revenus et d'assurer «une pleine capitalisation», c'est-à-dire de disposer en tout temps des fonds nécessaires au paiement de toutes les indemnités découlant des accidents d'automobile survenus jusqu'à ce jour. La totalité des sommes nécessaires à l'indemnisation de toutes les victimes d'accidents de la route survenus au cours de l'année provient, d'une part, des contributions versées par les titulaires de permis de conduire et les propriétaires de véhicules automobiles et, d'autre part, des revenus générés par les placements financiers effectués par la Société.

L'indemnisation sans égard à la faute : La grande nouveauté de la réforme de 1978 a été d'introduire le principe de l'indemnisation sans égard à la faute pour les dommages corporels. L'accident routier a, très souvent, de multiples causes, et l'établissement de la faute a toujours été un processus complexe et coûteux qui était abusivement défrayé par l'ensemble des assurés.

Le principe de l'indemnisation sans égard à la faute est apparu comme un moyen efficace de réduire les coûts et les délais. De fait, le nouveau régime a engendré des gains d'efficacité importants qui ont permis de diminuer le coût relatif de l'assurance, les longues enquêtes, les procès et les poursuites judiciaires n'ayant plus leur raison d'être.

Il n'y a cependant aucun lien entre l'application d'un tel principe et la nécessité de mettre en place un régime public universel. En effet, ce type de régime existe dans plusieurs pays et dans plusieurs États américains au sein d'un système privé d'assurance. Au Québec, les compagnies d'assurances ont même, par le biais d'ententes administratives, appliqué le principe de l'indemnisation sans égard à la faute aux dommages matériels. Mais l'indemnisation sans égard à la faute n'existe obligatoirement au Québec que pour les dommages corporels.

L'universalité du Régime : Il faut se rappeler qu'au Québec, avant la réforme de l'assurance-automobile, près du quart des victimes de dommages corporels causés par un accident d'automobile ne touchaient pas d'indemnités. Aujourd'hui, l'universalité du Régime assure le droit à l'indemnisation pour toutes les victimes d'accidents d'automobile indépendamment de leur âge ou de leur occupation. L'universalité du Régime touche également les contributions d'assurances qui sont obligatoires pour tous les titulaires de permis de conduire et tous les propriétaires de véhicules.

Les piétons et les cylistes ne contribuent pas au financement du Régime puisque l'assurance s'adresse aux conducteurs et propriétaires de véhicules moteurs. Ainsi, les piétons ou les cyclistes ne peuvent faire appel à la Société s'ils heurtent un véhicule stationné sur la voie publique, un autre piéton ou un autre cycliste, ni s'ils font une chute sans qu'un véhicule automobile ne soit en cause.

Cependant, le conducteur ou le propriétaire d'un véhicule en mouvement est assuré pour les dommages corporels causés à un piéton ou à un cycliste sans qu'il ait à se défendre devant les tribunaux pour réduire les montants réclamés ou pour prouver la culpabilité du piéton ou du cycliste. À l'inverse, ceux-ci sont désormais assurés d'une indemnisation lors d'un accident avec un véhicule automobile en mouvement.

La couverture des pertes réelles : Le Régime d'assurance automobile repose avant tout sur l'indemnisation «des pertes économiques» attribuables à un accident de la route. Toutes les indemnités sont pleinement indexées annuellement au coût de la vie. Cette couverture est exceptionnelle puisque d'année en année, environ 85 % des Québécois sont assurés d'obtenir une pleine compensation de leur revenu perdu en raison d'un accident d'automobile. Quant aux citoyens dont les pertes de revenus seraient supérieures à la couverture maximale offerte par la Société, ils peuvent obtenir une protection additionnelle auprès de leur assureur privé.

Mieux encore, depuis la mise en place du Régime, les sommes retournées aux assurés se sont accrues, en dollars constants, de 35 % par rapport à l'ancien régime. Quant aux délais, ils n'ont aucune mesure commune avec ceux qui prévalaient avant l'existence du régime alors que les victimes pouvaient parfois attendre des années avant de recevoir une première indemnité, à cause des interminables batailles juridiques qui opposaient les parties.

L'admissibilité : Le Régime d'assurance automobile du Québec est fondé sur le principe de l'indemnisation sans égard à la faute. Il accorde une protection à l'ensemble des Québécois victimes d'un accident de la route survenu au Québec ou ailleurs dans le monde. Ainsi, les indemnités accordées par la Société de l'assurance automobile du Québec le sont, sans égard à la responsabilité de quiconque, pour l'ensemble des dommages corporels subis dans un accident d'automobile. Le résident du Québec bénéficie du Régime d'assurance automobile peu importe le lieu de l'accident. Il est protégé au Québec et à l'extérieur du Québec.

L'indemnisation a pour objet de compenser les dommages corporels causés par une automobile, une de ses pièces, son usage ou son chargement. Elle couvre tout dommage physique ou psychique subi par une victime, y compris le décès, ainsi que les dommages aux vêtements portés.

Le Régime d'assurance automobile du Québec n'indemnise pas dans les cas suivants : si l'accident est causé par un appareil susceptible de fonctionnement indépendant comme, par exemple, un treuil de dépanneuse ; si l'accident implique des véhicules en partie exclus comme, par exemple, un tracteur de ferme, et qu'il a lieu en dehors du chemin public ; si l'accident implique des véhicules totalement exclus du Régime, soit les motoneiges et les véhicules tout terrain ; si l'accident survient en raison d'une compétition, d'un spectacle ou d'une course automobile sur un terrain ou un parcours fermé. Le droit à une indemnité se prescrit par trois ans à compter de l'accident ou de la manifestation du dommage.

Lorsque l'accident a lieu au Québec, est considéré résider au Québec le propriétaire, le conducteur ou le passager d'une automobile immatriculée au Québec. Par conséquent, ces personnes ont droit aux indemnités prévues par la loi sans égard à leur responsabilité dans l'accident et sans que la Société ne puisse exercer contre elles de recours subrogatoires. Le non-résident du Québec, victime d'un accident au Québec dont la voiture n'est pas immatriculée au Québec, a droit à l'indemnisation prévue par la loi en proportion inverse de sa responsabilité dans l'accident. La responsabilité est alors déterminée par preuve prépondérante et selon les règles du droit commun.

Entente Québec-Ontario : La Société de l'assurance automobile du Québec et le gouvernement de l'Ontario ont conclu, en décembre 1978, une entente relative à l'indemnisation des résidents de l'Ontario victimes d'accidents d'automobile au Québec.

En vertu de cette entente, dans l'hypothèse d'un accident au Québec impliquant un résident de l'Ontario, le processus est le suivant : Si l'Ontarien est conducteur, passager ou propriétaire d'un véhicule immatriculé au Québec, il est considéré comme un résident du Québec et est pleinement indemnisé par la Société comme tout autre touriste dans la même situation. Si l'Ontarien est non assuré, donc non couvert par l'entente, et s'il n'est pas conducteur, passager ou propriétaire d'un véhicule immatriculé au Québec, il sera indemnisé par la Société, mais dans la proportion de sa part de responsabilité dans l'accident. Si le résident de l'Ontario est un assuré, selon l'entente, et qu'il n'est pas conducteur, passager ou propriétaire d'un véhicule immatriculé au Québec, la Société ne l'indemnise pas. Il doit s'adresser à son assureur, qui l'indemnisera selon les bénéfices prévus par la Loi sur l'assurance automobile.


Indemnité de remplacement du revenu : L'indemnité de remplacement du revenu que verse la Société vise à compenser la perte de revenu d'emploi subie par une personne qui devient incapable de travailler à la suite d'un accident d'automobile. L'indemnité est établie à partir de la perte réelle de revenus. Le droit à l'indemnité de remplacement du revenu et le montant de celle-ci dépendent de la situation de la victime au moment de l'accident. Une indemnité de remplacement du revenu est versée à la victime qui est privée de prestations d'assurance-chômage ou d'allocations de formation à la suite de l'accident. Cette indemnité est calculée sur la base des prestations ou allocations ainsi perdues. Une indemnité de remplacement du revenu est également versée à la victime qui ne travaillait pas au moment de l'accident mais qui était sur le point d'occuper un emploi. Dans un tel cas, la victime est indemnisée sur la base de cet emploi.

L'indemnité de remplacement du revenu est versée à la victime tant qu'elle est incapable de vaquer à ses occupations. Dans le cas d'une incapacité de plus de deux ans, et afin de faciliter la transition entre la période d'inactivité et le retour sur le marché du travail, le Régime prévoit la prolongation de l'indemnité de remplacement du revenu pour une période additionnelle d'un an après que la victime soit devenue capable d'exercer un emploi en fonction de ses capacités résiduelles de travail. Enfin, une prolongation de l'indemnité de remplacement du revenu est également accordée à la victime qui redevient capable d'exercer son emploi, si elle l'a perdu en raison de l'accident.

Victime exerçant un emploi à plein temps : La victime qui occupe un emploi à plein temps au moment de l'accident a droit à une indemnité de remplacement du revenu si, à la suite de cet accident, elle devient incapable d'exercer son emploi. La victime reçoit une indemnité de remplacement du revenu tant qu'elle demeure incapable d'exercer son emploi. Après deux ans d'incapacité, la Société peut réévaluer l'incapacité de la personne en fonction de ses capacités résiduelles de travail. Lorsqu'il s'agit d'un emploi salarié, l'indemnité est calculée à partir du revenu brut tiré d'un emploi. Si la victime est un travailleur autonome, l'indemnité est calculée à partir du revenu brut reçu par un salarié pour un emploi comparable. Toutefois, si le travailleur autonome tire de son emploi un revenu plus élevé que celui fixé par la Société, l'indemnité est alors calculée à partir de ce revenu.

Le montant de l'indemnité de remplacement du revenu correspond à 90 % du revenu net de la personne. Le revenu net de la victime est égal à son revenu brut annuel d'emploi moins un montant équivalant à l'impôt provincial, à l'impôt fédéral, à la cotisation d'assurance-chômage et à la cotisation du Régime des rentes du Québec. Le revenu brut annuel d'emploi considéré est celui de la victime jusqu'à concurrence d'un montant maximal annuel assurable, lequel est de 46 500 $ pour l'année 1993.

Victime exerçant un emploi temporaire ou à temps partiel : La victime qui occupe un emploi temporaire ou à temps partiel a droit à une indemnité de remplacement du revenu durant les premiers 180 jours suivant la date de l'accident, tant qu'elle demeure incapable d'exercer son emploi. L'indemnité de remplacement du revenu représente la perte réelle de revenu subie par la victime en raison de l'accident. À compter du 181e jour suivant la date de l'accident, l'indemnisation s'effectue sur la base de la perte potentielle de revenu. L'indemnité de remplacement du revenu est établie à partir d'un emploi que la Société détermine à la victime et du revenu brut correspondant à cet emploi. Lorsque la Société détermine un emploi à la victime, elle doit tenir compte de sa formation, de son expérience et de ses capacités à la date de l'accident.

La victime qui occupe un emploi à temps partiel et prend soin d'une ou plusieurs personnes invalides ou âgées de moins de seize ans peut également recevoir une indemnité pour frais de garde si, en raison de l'accident, elle devient incapable de prendre soin de ces personnes.

Victime sans emploi capable de travailler : La victime qui n'exerce pas d'emploi au moment de l'accident n'a droit à aucune indemnité de remplacement du revenu durant les 180 premiers jours suivant la date de l'accident, l'indemnisation étant fondée sur la perte réelle de revenus durant cette période.

Si la période d'incapacité se prolonge au-delà de 180 jours, la Société réévalue l'incapacité de la victime en fonction de son potentiel de travail au moment de l'accident afin de compenser la perte de gains que cette dernière pourrait subir à moyen et à long terme. Dès ce moment, la victime est indemnisée pour la perte potentielle de revenus subie en raison de l'accident.

Ce dispositif contient toutefois deux exceptions donnant droit à une indemnité de remplacement du revenu durant les 180 premiers jours : lorsque la victime démontre qu'elle aurait exercé un emploi si l'accident n'avait pas eu lieu, et lorsqu'elle est privée de prestations d'assurance-chômage ou d'allocations de formation en raison de l'accident.

Aussi, la victime peut toujours, si la situation correspond aux conditions prescrites, recevoir une indemnité pour frais de garde. Dans ce cas, la victime peut choisir, au 181e jour d'incapacité, de continuer de recevoir l'indemnité pour frais de garde ou d'être indemnisée sur la base d'un emploi potentiel correspondant à ses capacités.

Victime âgée de seize ans et plus qui fréquente à temps plein un établissement d'enseignement : L'étudiant âgé de seize ans et plus a droit à une indemnité aussi longtemps qu'il est incapable d'entreprendre ou de poursuivre ses études et que cette situation le retarde dans la réalisation de son programme scolaire. La loi vise à compenser le retard subi dans les études. Ainsi, aucune indemnité n'est payable à la victime qui, bien qu'ayant été incapable de poursuivre ses études, n'a par contre subi aucun retard dans celles-ci. C'est que l'indemnisation est fondée sur le principe de la perte économique réellement subie en raison de l'accident, et si la victime ne subit pas de retard dans ses études, elle ne devrait pas en subir dans son entrée sur le marché du travail. La victime a droit à cette indemnité jusqu'à la date prévue au moment de l'accident pour la fin des études en cours. Aussi, la victime qui travaille au moment de l'accident --

The Chair: Excuse me. We have five minutes left for your presentation. You can read all this into the record; it will go into the record. You should sum up if you want to give the committee members a chance, but it's up to you if you want to go right straight through until 11:30. It's your choice; you're the presenters. I just wanted to let you know.

M. Genest : Merci. Alors, je vais résumer durant les cinq prochaines minutes.

Donc, pour la victime âgée de seize ans et plus qui fréquente à plein temps un établissement d'enseignement, le dispositif est le paiement de forfaitaire qui correspond au retard pour l'entrée sur le marché du travail. Ce forfaitaire s'élève à 6 208 $ par année perdus au niveau secondaire et à 6 208 $ par session d'études ratée au niveau postsecondaire, jusqu'à concurrence de 12 417 $.

Pour les victimes âgées de moins de seize ans, la couverture est la même dans le sens que le système d'assurance-automobile du Québec compense le retard d'entrée sur le marché du travail, mais les montants forfaitaires sont accordés ainsi : au niveau primaire il est de 3 386 $, et pour les autres, secondaire et postsecondaire, ce sont les mêmes montants.

La victime âgée de 64 ans et plus : Lorsqu'à la date de l'accident, une victime est âgée de 64 ans et plus, l'indemnité de remplacement du revenu est réduite de 25 % à compter de la deuxième année, de 50 % à compter de la troisième année et de 75 % à compter de la quatrième. De la même façon, une victime qui avait 64 ans au moment de l'accident et qui reçoit une indemnité de remplacement du revenu voit une réduction dans le même ordre.

Une victime qui est invalide -- c'est-à-dire, régulièrement incapable d'exercer tout emploi -- ne reçoit aucune indemnité, puisqu'elle n'avait pas de revenus au moment de l'accident.

Les indemnités de décès : Les indemnités de décès sont accordées au conjoint survivant qui a droit de recevoir une indemnité qui varie entre 45 000 $ et 232 000 $, selon l'âge du conjoint au moment de l'accident et le revenu du conjoint au moment de l'accident.

Les personnes à charge autre que le conjoint ont droit à des indemnités également. Elles varient de 21 000 $ à 39 000 $, selon l'âge des personnes à charge, selon l'âge des enfants.

Quant à une personne qui n'a ni conjoint ni personne à charge, la Société paie aux parents ou aux personnes qui en tiennent lieu une indemnité forfaitaire de 16 900 $.

Nous versons également une indemnité pour frais funéraires.

La victime a droit à une indemnité pour dommages non pécuniaires qui est établie selon un barème qui représente la perte permanente d'intégrité physique ou psychique et qui est versée jusqu'à un maximum de 127 250 $. Le barème constitue une liste des atteintes physiques. Suite à une évaluation médicale, un pourcentage est fixé et ce pourcentage est multiplié par le maximum de 127 000 $.

Nous avons des programmes de réadaptation qui couvrent l'ensemble des besoins selon un plan de réadaptation, sans aucune limite de montant, et nous couvrons également tous les frais engagés par l'accident, quelle que soit leur nature et sans aucune limite.


En conclusion, nous avons, dans un document publié récemment par l'Organisation de coopération et de développement économiques, un commentaire qui souligne que les sommes versées au Québec pour dommages corporels représentent environ 135 % de celles versées avant le Régime. Une partie des indemnités versées sous l'ancien régime servait à acquitter les frais de perception et de réclamation et les frais juridiques. Ainsi, les sommes retournées directement aux assurés sont forcément plus élevées maintenant. Mais les gains réels pour les Québécois vont bien au-delà de ces montants, et ils résident surtout dans l'universalité du Régime, dans la pleine compensation de la perte économique.

Enfin, dit toujours l'OCDE, l'administration du Régime par une régie publique a permis des efforts considérables pour la réadaptation des victimes, reduisant ainsi la période d'inactivité et donc d'indemnisation, de même qu'une implication majeure dans des efforts de prévention routiers qui ne sont certes pas étrangers aux résultats positifs de ces dernières années.

Je vous remercie de votre attention. Je pense que je suis entré dans le temps des partis.

The Chair: Yes, all the time was used up. This was a lot of information you put out in half an hour. As I was listening to the interpreters, receiving this in English, there wasn't one period or comma because of the speed. There was quite a bit of information you got out, so I would appreciate it if you could give a telephone number to the committee members, or Franco could get a telephone number and an address. I think there might be some questions. Maybe they could give you a call and possibly you could get some answers back to them. As I say, there is quite a bit of information here. Does the committee agree with that?

Mr Tilson: Mr Chair, I have a point of order on this whole process. This group of people -- and I respect what they've presented to us; it will be very useful to study it, and we may or may not have some questions. The problem I have is that this group of people were invited by the Ministry of Financial Institutions. I suspect the Ministry of Financial Institutions paid for their flight here from Quebec City, probably paid for their accommodation and their food. This ministry is relying on this group as an example of why this system should work for Bill 164.

I have no problem with the government doing that. I have a lot of problems with the fact that there's been no time allowed for us to ask questions of this group about the Quebec system. I can't believe you're saying: "We'll give you a phone call. Give us your phone number and we'll give you a call."

I also can't believe this wouldn't be put in a briefing session just like Mercer was. Mercer is an expert witness; these people are expert witnesses. This system is why the government is proceeding. They're using this as an example. This group normally would have been put forward at the time when Mercer and other experts were. I resent the fact that members of the public of this province have been excluded because the Ministry of Financial Institutions wants to put forward its pap.

Mr Owens: Mr Tilson has insinuated -- not only insinuated, but has directly said that the Ministry of Financial Institutions has paid the fare and the freight to have the Société de l'assurance automobile du Québec come here this morning. That is in fact not correct, and Mr Tilson should withdraw his remarks immediately.

Mr Winninger: For shame.

Mr Tilson: Mr Chairman, I don't want to get into a debate on this subject. My point of order is on the whole fact of the procedure.

Mr Owens: You should withdraw your remarks.

Mr Tilson: I'm not withdrawing anything. There's nothing out of order. The Ministry of Financial Institutions invited these people to come. The more appropriate time to come would have been at the briefing session. The briefing session should have expanded. We had inadequate time to question Mr Tully; we had inadequate time to question the Mercer people, and we had no time to question these people.

The Chair: Mr Tilson, as I'm here as Chair, I have no prior knowledge of any -- this is just another group appearing before this committee. That's what I'm telling you as the Chair. They had, I told them at the very beginning from 11 until 11:30.

Mr Tilson: Mr Chairman, I respect you. There's no criticism towards you. My criticism is directed towards Mr Owens and the Ministry of Financial Institutions for manipulating the time that's taken away from the members of the public of this province to come and speak their mind on this issue.

Mrs Elinor Caplan (Oriole): Mr Chairman, I think the concern is a legitimate one. People who have watched this very excellent and informative presentation are going to assume that these plans are identical, that the Quebec plan we heard about today and Bill 164 are identical. In fact they are not. They are very, very different, and not having an opportunity to raise those points and these questions has frustrated opposition members of the committee. We're already hearing interchange and interjections from government members suggesting that in fact the plans that are proposed in Bill 164 and the presentation before us are similar; in fact, identical. That is upsetting and confusing. I think Mr Tilson makes a good point, that it would have been better for everyone if we could have had this presentation during the initial briefing. Certainly on behalf of my constituents in the riding of Oriole and consumers who are going to pay more because of Bill 164, there are a number of questions I would have liked to have asked.

Having said that, I don't see the parliamentary assistant or the Ministry of Financial Institutions offering an alternative solution, and I don't think "just make a phone call" is a responsible response.

The Chair: I have to say that was my suggestion. That's why I broke in at 25 after. I thought I could say, "Let's stop here so everybody has a chance to ask a question."

Mr Owens was next on a point of privilege.

Mr Owens: Just to continue the correction of the record, the Société is here as a witness, not as an expert witness. For Ms Caplan's benefit and for the benefit of her constituents, let me give you a historical perspective on how this technical briefing was put together. First of all, your representative, as well as the representative of the third party, declined to have a technical briefing; they said it was not necessary to have a technical briefing.

Mr Tilson: That's not true.

Mr Mancini: That's not the issue at all.

Mr Owens: The issue is that Mr Harnick, then along with Mr Kormos, came and requested --

Mrs Caplan: I challenge, Mr Chairman, that this is not a point of privilege.


Mr Owens: You declined the offer of a technical briefing.

The Chair: I'm going to listen to this committee. Myself, I would not extend the time, but if I hear from this committee that they want to extend it, I believe the other group is late coming in. We get at least one question from each caucus?

Mr Mancini: Five minutes from each caucus.

The Chair: Five minutes?

Mr Owens: One question.

The Chair: Okay, five minutes or one question. Do I hear that the committee's in agreement with that?

Mr Owens: What are we agreeing to, Chair?

The Chair: Five minutes per caucus per question. With these people coming from Quebec, I think it's important that --

Mr Mancini: Five minutes, Mr Owens.

Mrs Caplan: That's reasonable.

The Chair: We start off with Ms Caplan, five minutes.

Mrs Caplan: Thank you very much, Mr Chairman.

Mr Owens: Just a second.

The Chair: I didn't hear anybody opposing.

Mrs Caplan: The question I have, and I want to thank the --

Mr Owens: Excuse me, Ms Caplan. The issue --

The Chair: I'm the Chair. I'm sorry, Mr Owens.

Mr Owens: The issue with respect to --

Mr Mancini: Will you stop pretending you're the committee Chair? Mr Ron Hansen is the committee Chair.

Mrs Caplan: This is embarrassing for our guests.


The Chair: Mrs Caplan, five minutes.

Mrs Caplan: I would like to ask if you have had an opportunity to review Bill 164 as compared to Ontario's existing plan, and if you've seen the Mercer report, and could tell us from your experience whether you believe that the premiums will go up for consumers in Ontario as a result of this plan?

Mr Gélinas: When we accepted to come here and give our comments on the Quebec administration of its public insurance policy, it was to describe how it functioned and not to make a comparison with the system that is proposed for Ontario as such.

Mrs Caplan: The point is that, as you understand it, the two plans are very different; they're not identical.

Mr Gélinas: I don't want to get into a discussion where we'll be comparing both systems. Our purpose here today is not to compare both systems. It's strictly to give you an explanation of how our system works. We don't want to go into any other discussion dealing with the proposed system in Ontario, because then we get into a debate that is of a more political nature.

Mrs Caplan: The concern I'm raising is that by your presence here this morning and our frustration in not being able to have a greater discussion with you is the suggestion that in some way the plans have been compared and are found to be identical. I appreciate you clarifying that that is not the purpose, that you were here to describe the Quebec plan, which is different from the Ontario plan, and you're not here to compare them. I'm going to yield to Mr Phillips.


The Chair: You've got two minutes.

Mr Phillips: Thank you. The thing that's preying on our minds is just what's going to happen to the people of Ontario in terms of cost, because I just happen to have before me the Quebec fiscal situation. Things are desperate there, and they're desperate here.

Based on the most conservative estimate, every single individual out there is going to be paying substantially more in automotive insurance premiums. This is a regressive situation, because regardless of your income, regardless of whether you have a job or not, you need automobile insurance and you have to buy it, and this bill, according to the government estimates, will take the premiums up by at least $200 million.

Yesterday we saw, as I said before, a government that couldn't afford $60 million for people who are on welfare in the province because it has no money, but can afford at least $200 million in incremental premiums. That's why you're helpful for us, because I'm anxious to know whether your premiums this year are being held below inflation -- we're assuming, by the way, that the increase is on top of a normal increase -- that you've been able to hold yours at below inflation. I realize you haven't had a chance to study in depth this bill, but would your judgement be that this increase will be in the 5% range?

Mr Gélinas: I think Mr Breton can give you an explanation of the financing of our own system in Quebec and how the cost of premium insurance for bodily injury has been treated from 1978 to today, because our financial situation as of now is an extremely good one. Mr Breton will give you an explanation of that.

Mr Martin Breton: Two things we can say about financial issues. I don't know how they apply here, but we know how they apply in Quebec. First of all, for each dollar paid in premium in Quebec with the no-fault system now, victims receive a higher percentage out of every dollar they pay in premium. That's the first thing. The other thing is that the premium for a normal car was $85 in 1978 and now it's $85 in 1993, but the $85 in 1993 includes a 9% tax. So it means it's lower now than it was in 1978.

The Chair: I'll have to go on to Mr Tilson.

Mr Tilson: I gather you haven't had an opportunity to study the bill this committee is looking at; you haven't had a chance to look at this bill.

Mr Gélinas: Personally, no.

Mr Tilson: Can you compare the Quebec legislation to any other jurisdiction either in Canada or the United States?

Mr Gélinas: Quebec, I think, is the only one to have what we call a pure no-fault system as such. I have been present at many conferences of the American Motor Vehicle Association of Administrators and we have spoken many times about how our system works. You have many systems in the States that are a combined system of no-fault and tort, and you also have other no-fault systems in Canada, but they apply as well to material damages and to bodily damages. They also are, in some jurisdictions, only a basic protection, while ours is what you could call a pure no-fault system.

Mr Tilson: I wanted to say, sir, just so you're certain that my outrage is not directed to you, that it's directed towards the government and the Ministry of Financial Institutions. I do appreciate your coming and giving this report. It's too bad that we don't have more time to ask further questions of you, but Mr Harnick has one more question from our party.

Mr Harnick: I note your comment that you describe Quebec as a pure no-fault system. Even in that pure no-fault system, on page 6 of your brief -- and I'm referring to the English version -- you state, "As for citizens whose loss of income would be more than the maximum coverage offered by our agency, they can seek additional coverage from their private insurer."

I'd like you to know that Ontario has the distinction under Bill 164 of being the only jurisdiction in North America that takes away the right to claim for actual economic loss. I'm interested that even in a pure no-fault system, you have not taken that right away but have given people the option to purchase economic loss insurance. Is that correct?

M. Genest : De fait, nous avons établi un maximum assurable de 46 500 $ en 1997 et, au-delà de ce maximum assurable, tout individu peut obtenir une protection additionnelle auprès d'un assureur privé. Mais, pour tous les dommages corporels couverts par le Régime d'assurance automobile, le droit à l'indemnité remplace totalement le droit de poursuite devant les tribunaux.

Mr Harnick: I appreciate that, but your brief indicates that an individual can protect himself by purchasing additional insurance. Is that correct?

Mr Gélinas: That is correct.

Mr Harnick: I appreciate that, because Ontario will be the only jurisdiction in North America that is so regressive as to take away that right for people to protect their economic losses. I'm glad you came here today to show that even in a pure no-fault jurisdiction, people still have economic rights. I thank you for being here today.

The Chair: That was perfect, Charles. You're right on.

Mr Harnick: And I'm glad you agree with the content as well, Mr Chair.

The Chair: I appreciate it, Mr Harnick. Mr Johnson.

Mr Paul R. Johnson (Prince Edward-Lennox-South Hastings): Thank you very much for being here today. I'd like to continue to pursue this in a somewhat similar vein to Mr Harnick. I understand there is no right to sue for economic loss in Quebec. Is that correct?

Mr Gélinas: That is correct.

Mr Johnson: Are people happy with this? Are the clients, the people who use the system, happy with that?

Mr Gélinas: We have made over the last 14 years certain surveys of persons who have received indemnities from the Société, and our satisfaction in that process is close to 80%, if I remember well. There is general satisfaction there.

Mr Johnson: That's very good to know. Mr Tilson asked a question earlier that I don't know if we had an answer to. I hope you may be able to answer. It's a question with regard to today, and not about insurance per se. Did the Ministry of Financial Institutions pay you to come here today?

Mr Gélinas: From what I know, we haven't even discussed it. We were just invited.

Mr Johnson: Just one further question: Has the provision of unlimited medical and rehabilitation resulted in a large escalation of costs for the Société?

Mr Gélinas: All our rehabilitation process is administered by our vice-president for accident victims. I think that M. Genest can give a complete picture of our rehabilitation procedures and financing of that also.

Mr Johnson: Thank you. I would appreciate that.

M. Genest : Les frais de réadaptation ne comportent pas de limite. Toutefois, le plan de réadaptation est établi par des professionnels qui, en collaboration avec les systèmes sociaux et sanitaires de la région et les organismes communautaires, établient un plan sur une année, deux années, trois années selon les capacités résiduelles de la personne, sa formation, son expérience et son plan de carrière.

Ce plan de réadaptation est ensuite appliqué avec les ressources du milieu et conduit par les conseillers en réadaptation. Lorsque le plan est complété et que les évaluations sont complétées, la personne se voit déterminer un emploi et réintégrée sur le marché du travail par les soins du programme de réadaptation.

Nous n'avons pas de limite. Nous avons des programmes de réadaptation qui touchent l'aménagement résidentiel, l'aménagement des véhicules, la formation, les réadaptations cognitives, les traumatisés craniens ou cérébraux... Cet investissement-là, selon nos études, permet un retour sur le marché du travail de l'ordre de 70 % des personnes visées par le programme.


Nous payons également les frais médicaux occasionnés par les accidents de la route au Fonds consolidé du revenu, qui représente à peu près 80 millions de dollars par année, lesquels sont indexés et sont révisés à tous les trois ans selon le nombre de journées d'hospitalisation et les frais qui sont engagés pour les services médicaux. Mais les frais ne sont pas payés à la pièce ; ils font partie d'un transfert global effectué au Fonds consolidé du revenu pour le ministère de la Santé.

Nous avons également un système de contrôle des coûts qui, globalement, est assuré par la formation des agents d'indemnisation, un système informatique très performant, et une étude approfondie de chaque dossier de réclamation.

The Chair: I would like to thank you for appearing before this committee, and I thank this committee for the direction it has given the Chair so it didn't put the Chair in a bad spot in having to make the decision; that you had an opportunity and the committee was able to ask questions.

The clerk has said to me that you had applied to come before this committee, so that was correct. I'm glad to welcome you to Ontario and I'm glad that you were able to be here. I hope we have the same reception and that you can bend the rules in Quebec for us if we ever come up. Thank you for appearing.


The Chair: The next group we've got is the Ontario Teachers Insurance Plan. Could you come forward, please. I'm sorry for the slight delay, but sometimes everything isn't perfect in this process. You have one half-hour; in that half-hour, as you can see, it would help if you could leave some time at the end for the members of the committee to ask questions. I don't want to go through the same exercise again for each group that comes forward. If you don't mind identifying yourself for the purposes of Hansard and the people of Ontario, you may begin.

Mr François Tisi: Thank you kindly. Our presentation is approximately 12 minutes, so there should be ample time for questions.

I'm François Tisi. I'm the chief executive officer of the Ontario Teachers Insurance Plan, and with me I have Randy McGlynn, who is the executive director of marketing and insurance.

The Ontario Teachers Insurance Plan, or Régime d'assurance des enseignantes et des enseignants de l'Ontario, is a non-profit trust established in 1977 by the five teacher affiliates of the Ontario Teachers' Federation. The board of trustees of OTIP is composed of two teachers appointed by each of the five teacher affiliates of the Ontario Teachers' Federation: L'Association des enseignantes et des enseignants franco-ontariens, the Federation of Women Teachers' Associations of Ontario, the Ontario English Catholic Teachers' Association, the Ontario Public School Teachers' Federation and the Ontario Secondary School Teachers' Federation.

In 1991, OTIP managed more than $50 million on behalf of its members, while providing long-term disability insurance to approximately 70,000 employees of public and separate school boards across the province.

OTIP wishes to acknowledge the careful and thorough approach taken in the development of amendments to Bill 164.

We are pleased that the Minister of Financial Institutions is conducting public hearings and appreciate the opportunity to present to the standing committee on finance and economic affairs observations drawn from our experience in the automobile insurance and long-term disability fields.

In order to meet its objectives of product and service excellence, OTIP requires an environment that encourages communication, cooperation and partnership. By allowing us to present our concerns to the standing committee, we have begun this process. We ask, however, that you consider our concerns in the deliberation of new guidelines and policies affecting our members.

The main objective of OTIP from its inception has been to provide the best available insurance benefits at competitive rates for active and retired educational employees. We believe that with your help we can achieve this objective.

New risk classification system: OTIP is concerned that the new "uniform, non-discriminatory risk classification system" may mean substantial, unfair and prohibitive rate increases for young women and senior citizens. We are encouraged by the assurances regarding proposed section 413 that "the new plan will be phased in over several years through a process which minimizes rate dislocation for consumers." We note in this regard that the Lieutenant Governor in Council will prescribe by regulation a risk classification system and, furthermore, that there will be a regulation to limit rate changes. OTIP respectfully recommends that every consideration be given to limiting the rate increases on young women and senior citizen drivers so that the increases are introduced on a gradual basis.

Accident benefit reforms: In its submission to the standing committee on general government on Bill 68 in 1990, OTIP argued that auto insurers, not private disability insurers, should bear the costs of injury, long-term care and rehabilitation of persons injured through auto accidents. This recommendation was not placed in the current Insurance Act. We note that the position was considered in the amendment of the current legislation, but was later rejected. The Road Ahead states:

"This package of accident benefits was designed after careful balancing of two key objectives: adequate coverage and affordable auto insurance. Difficult tradeoffs were involved. For example, consideration was given to making auto insurance, rather than private disability plans, the primary payer of compensation for people involved in auto accidents. The large premium increases associated with such change made that proposal unworkable. The interface between auto insurance and other disability systems will be the subject of further review."

We agree that our proposal may increase premium rates, but it will do so fairly and not place an unfair burden on those who have private disability insurance.

OTIP recommends that auto insurance be the primary payer where disability is directly related to an automobile accident.

OTIP provides disability insurance to 70,000 educational employees through benefit packages negotiated by these employees and their school board employers. The negotiated benefit package is included in the collective agreement. The disability insurance plan incorporates, in various ways, the use of the individual's accumulated sick leave credits. Frequently, if the sick leave credits remain unused at the point of the employee's retirement, they are converted to gratuity and are part of the employee's retirement income.

OTIP believes that it is unfair to the employee who, while endeavouring to keep well, is injured in an auto accident and therefore required to use up these credits and to use his or her disability insurance. OTIP contends that the disability insurance plans should not be used to cover automobile accident injuries. Requiring private disability insurance plans to be the primary payer places the insured in the position of subsidizing lower rates in the entire auto insurance industry.

Employees who have prudently and wisely protected themselves at their own expense and discretion against unforeseen illness or injury should not be required to subsidize lower auto insurance rates for those who are not covered by private disability insurance. It requires those who do to pay twice.

OTIP recommends that if auto insurance is not the primary payer, rate adjustments be permitted for those who are covered by private disability insurance plans.

One-week waiting period: The current legislation requires an injured person to wait one week before benefits begin. As the loss of wage begins on the day of the accident, it is apparent that anxiety, as well as suffering, can only be prolonged by any delay in benefits. The sense of security that benefits provide the victim will most certainly aid in a speedy recovery. Benefits must not be seen as merely financial compensation but as an integral component of one's rehabilitation. The sooner benefits are delivered, the sooner rehabilitation can be achieved.

OTIP recommends that the one-week waiting period before benefits begin be eliminated.

Access to courts: OTIP supports granting innocent victims the right to sue for damages related to non-economic losses, that is, pain and suffering. We agree that those who suffer loss of enjoyment of life or life expectancy, through no fault of their own, ought to be able to establish in court that they were not at fault and that they are entitled to compensation. We are concerned that the requirement that an award of the court be subject to a mandatory deductible of $15,000 will, in our view, create an unnecessary floor of $15,000.

OTIP recommends that the award of the court, in cases of pain and suffering, not be influenced by the pre-set deductible.

Rehabilitation benefits: OTIP has earned an invaluable reputation not only as an effective and efficient long-term disability insurer but also as a provider of prudent and comprehensive rehabilitation services. These services have helped a great many educational employees, disabled through illness or accident, to return to full or partial employment in relatively short time. We are concerned about two aspects of the rehabilitation provisions proposed in Bill 164.

First, the tabled legislation proposes the repeal of subsection 268(1) and proposes in subsection (1.3) the requirement that all insurers "pay for reasonable measures to (a) reduce or eliminate the effects resulting from an injury; and (b) facilitate an injured person's reintegration into his or her family, the labour market and the rest of society."


OTIP supports the inclusion of this provision, but is concerned that there is no clear definition that constitutes "reasonable measures." While it is difficult to define "reasonable," it is possible to judge in a certain situation, by weighing the severity of the injury and the rehabilitation steps taken, whether the steps taken to rehabilitate the injured person have been reasonable.

We are of the view that some sort of appeal to an independent arbitrator or arbitration panel for review of the measures would be fair to the injured person. In the absence of such an appeal process, it is our fear that unnecessary litigation under section 267.1 will ensue.

OTIP recommends that an independent arbitration process be established to review the steps required of insurers as set out in the proposed subsection 268(1).

Our second concern under rehabilitation benefits arises from the fact that OTIP is required to provide its services to the injured person prior to the auto insurer being involved. Considering the fragility of rehabilitative efforts on the part of the insurer and the insured, it would appear reasonable and beneficial to the injured person that there be an integration framework governing the rehabilitation measures taken by OTIP and later by the auto insurer.

OTIP recommends that the regulation include guidelines governing the integration of the private disability insurer's rehabilitation program with that of the auto insurer.

Therefore, the OTIP recommendations are as follows:

-- That rate increases, especially as they apply to young women and seniors, be phased in over a period of several years;

-- That auto insurance be the primary payer where disability is directly related to an automobile accident;

-- That if auto insurance is not the primary payer, rate adjustments be permitted for those who are covered by private disability insurance plans;

-- That the one-week waiting period before benefits begin be eliminated;

-- That the award of the court, in cases of pain and suffering, not be influenced by the pre-set deductible;

-- That an independent arbitration process be established to review the steps required of insurers as set out in the proposed subsection 268(1);

-- That the regulation include guidelines governing the integration of the private disability insurer's rehabilitation program with that of the auto insurer.

On behalf of OTIP, I would like to thank the standing committee for selecting us to make this presentation.

The Chair: Thank you. Mr Tilson.

Mr Tilson: Thank you for coming and giving us your presentation. I know our party will be studying many of your remarks for possible suggestions and amendments to this bill, when that time comes.

I know your interest is in teachers, but the other issue I'd like you to direct your thoughts to is students and infants. I know your sole interest is protecting teachers, but teachers do get involved with students. Students and infants don't have any income, or they have a very nominal income, and I don't believe they can purchase any disability insurance, the disability insurance you're speaking of, for protection of loss of income: economic loss. Any arbitrary rule, I hope you would agree, would be unfair to infants, would be unfair to students. Arbitrary rules simply can't properly assess the potential of those students or of those infants.

The other question is, what about students who are injured but can eventually participate in the labour force, but with a diminished income; they can't do many things? Who's going to decide what their loss is? Some arbitrary committee sitting somewhere, I suppose. Will the private insurers make those decisions?

I know you've directed your comments towards teachers, but teachers make their money from students, and I'd like to hear your thoughts about how students can be protected from your perspective.

Mr Tisi: On the first part, there's no doubt that we addressed our presentation based on the people we represent, who are the educational community. More specifically, the problem we see with regard to the rehabilitation -- because we have rehabilitation personnel working for us -- and to the long-term disability is the possibility of a conflict unless there is some integration. One agency or an insurer starts off with a rehabilitative program, the long-term disability comes in, here's another set of professionals who will be dealing -- there should be some integration for the best of the injured person, and it's the integration portion that we referred to specifically.

With regard to the students, there's no question, Mr Tilson, that we did not address that portion in our presentation. There's probably some validity to what you're bringing forward.

Mr Tilson: Thank you. Mr Harnick has a question.

Mr Harnick: This Bill 164 takes away a person's right to claim for any economic loss beyond what their auto insurance blended with their private disability coverage might offer. In other words, someone can, at the end of the day, suffer loss beyond what all of their insurance benefits would pay them. Do you agree that after you've paid a premium for your disability benefits and a premium for your auto insurance benefits, you should still have the right to claim for any economic loss you might still be sustaining?

Mr Tisi: The one point I'd like to reiterate is that we insure over 70,000 educators for long-term disability and, according to the proposed legislation, once these individuals are eligible for long-term disability, the long-term disability becomes the primary payer. I know that the vast majority of educational employees in this province are insured for long-term disability. Our point with regard to that aspect was simply that it's not fair to them, because they are protected and they are paying the premium out of their own pockets because of the taxability of long-term disability. It's not fair that because they protect themselves then their long-term disability becomes the primary payer.

We're simply saying that the auto insurance should be the primary payer. If the long-term disability stays as proposed, there should be a reduction in their rate to compensate people who are adequately protected because of long-term disability.

Mr Harnick: What I'm driving at, though, is that there still may be a shortfall. If they're the innocent person involved in an accident, shouldn't they have the right to claim any economic loss they suffer, through no fault of their own, that has diminished their earnings from what they would be getting as a teacher if they were working full-time? It's a simple proposition: the right to claim economic loss.

Mr Randy McGlynn: It is an insurable risk, and the consumer does have the right to buy that coverage in the open marketplace.

Mr Harnick: No, they don't; not under this legislation. That right has been taken away from them.

Mr McGlynn: Not under 164, but to cover all disabilities --

Mr Harnick: Yes, but that only pays you your benefit on the day of the accident, depending on what you're making that day. What if you have a future ahead of you and you're going to make more 10 or 15 or 20 years down the road, when you go from being a teacher to a vice-principal or a vice-principal to a principal?

The Chair: Mr Harnick, I've got to carry on. Mr Dadamo.

Mr George Dadamo (Windsor-Sandwich): Thank you for your presentation. I wanted to direct your attention to page 1. You state, "In 1991 OTIP managed more than $50 million on behalf of its members while providing long-term disability insurance to approximately 70,000 employees" I know you're always on the search for good plans for the employees throughout the province of Ontario. You acquire many insurance coverages from other sources. Does Bill 164 enhance, at the end of the day, or are there some pitfalls? I need to know that.


Mr McGlynn: By and large, it enhances the coverage that the membership we represent would be protected for. We have some concerns, as we expressed, in terms of allocation of the premiums. We think it's double-dipping to charge for long-term disability then pay for the same benefit under the auto insurance and take it away through a contract provision. That was our concern in that area. Certainly the enhancements, including the adjustment for inflationary increases and the lifting of caps, together with the extra work in the area of rehabilitation that we understand has begun, will be of benefit to those people who are, unfortunately, injured in accidents.

Mr Dadamo: You also recommend that auto insurance be the primary payer where disability is directly related to an automobile accident. Can you explain what you mean by that?

Mr McGlynn: It goes back to my comment on double-dipping. You're paying for both long-term disability or an income replacement program, as well as automobile insurance; in both cases you're buying disability protection. Our concern is that you either allow for a discount in the long-term disability premiums by making the auto insurance the primary payer so the premium reduces for the long-term disability, or else you reduce the auto insurance premium to recognize the fact that somebody has gone out and looked after that through an all-encompassing program, which is what I was addressing with Mr Harnick.

Mr Tisi: On this issue, one important fact most people are probably aware of is that if the long-term disability premiums are paid by the employee, the benefit is non-taxable. Therefore, in Ontario, the majority of educational employees pay their own premium for long-term disability. Long-term disability is not a benefit that is cheap. It's not uncommon to see premiums of 1% of salary or more. So they're already paying for their own long-term disability benefit and they're paying for their auto insurance. On the other hand, because they're well protected, if they become disabled as a result of an auto accident, then their long-term disability kicks in. Obviously, the rates for long-term disability have a relationship to experience. That's what Randy was coming at with regard to the double-dipping.

Mr Mancini: I have one very short question and then I'm going to turn the floor over to my colleague. It deals with a question you think you may have already answered; that is, whether this bill is an enhancement for your members. We've heard testimony by other witnesses before the committee that this legislation will raise rates. The government has accepted that fact. Their own consultants say rates will go up by 4.5% minimum, worth $200 million if you extrapolate that across the province. Yesterday, we heard Mel Swart, a former member of the Legislature, say that while rates will be going up, benefits will be reduced by 15%.

Are your members the only ones who are not going to be affected by that reduction? Are you in a special category that won't be affected? How does that work? How is the pie going to shrink and you not be affected? That's the question.

Mr McGlynn: You have two points. One, you're looking at the premium that is going to be charged. When both actuaries from opposite sides determine that there's going to be a rate increase, I don't think there's any doubt that there's going to be a rate increase. I believe there is value for the additional premium, whatever it is. I believe it's some place between both, because assumptions are really the basis for what actuaries develop. They've both taken positions, and likely someplace between is the truth. When you weigh where that number is against the additional benefits we see outlined in the legislation, we think it represents value. We have to speak for the members we represent, but I would say that value likely extends beyond them as well.

Mr Mancini: I have more questions, but I'd like to turn it over to my colleague.

Mr Phillips: I appreciate the comments, because each of your members, I gather, will face a premium increase of around $100 or thereabouts. That's midway between the two numbers we've seen. I think you're aware that the government said it will give 0% to the educational system this year and 0% next year; there's no more money going out to pay teachers' salaries. But your members say they're prepared, each of them, to fund this to the tune of at least $100 just for these benefits, plus any additional charges you would have. But you've made that determination, that it's worth $100. I appreciate that comment, because I deal often with teachers --

Mr Klopp: He didn't say that.

Mr Phillips: He did say that. My question really is around disability, where you've given us an interesting suggestion. I want to follow it up. As I understand it, you're saying that if one of the teachers is in an accident, you want this bill to cover long-term loss of income, not your current disability insurance. You'd like it to be covered under this bill.

Mr McGlynn: We don't care which way it goes. You either cover it under the bill or you give a premium reduction to acknowledge that --

Mr Phillips: Let me finish the question, just in case I don't get it. Sometimes the Chair cuts me off.

The Chair: You've got one minute.

Mr Phillips: Imagine for a moment that they are covered by auto insurance and not long-term disability. Imagine for a moment that we amended this to say that. Have you examined what that would mean in terms of teacher income for long-term disability? Would they be in any way impacted in terms of what they would get over the duration of the disability?

Mr Tisi: First of all, let's look at the first part of it. I'd also like to make some comments on the first part of what you said. Let's look at the question as such. We are saying that we represent a group of employees where probably 95%-plus are insured for long-term disability. That's very important, because if we were representing a group of employees who did not have long-term disability, then it wouldn't be that much of a concern. If they get into an accident and if they are disabled because of the auto accident, then the plan will pay. But because we represent a group of employees where most of them have long-term disability coverage, then as soon as they are eligible for long-term disability, the plan they pay for will trigger. That's what we're saying.

If you look our proposal, there are two sections. The first one says we believe that the auto insurance should be the primary payer. We could have stayed and left it right at that. We realize there could be some substantial costs, if that's the route the government decides to go.

On the other hand, there's a second recommendation right after it that says that if it is not the primary payer as these people have a private plan, they should get a reduction in their auto rates. Otherwise, they are supplementing --

Mr Phillips: My question, though, was that if they were the primary payer, does it impact the settlement for your members?

Mr Tisi: If they were the primary payer, then the LTD, if it did kick in, would be an offset. So the LTD would pay whatever the contract says, less --

Mr Phillips: I see. So you'd want a supplement on top of that.

Mr Tisi: They're paying for it. We don't want a supplement. We're just saying that they're not going to get any more. Most of our people -- I think as an example you would look at a 60% benefit, the majority. There's higher, but for most of them, the above-average long-term disability coverage is about 60%. All we're saying is that whatever that 60% is, they wouldn't get any more, but as it's an auto accident, automobile should be the primary payer. If it doesn't equal their 60%, then the insurer can top up to the 60%, and that would affect the insurance rate they are paying.

The Chair: I'm sorry, Mr Phillips. We're going to have to cut it off.

Mr Phillips: That's too bad. They're good witnesses.

The Chair: I know it's been a really good conversation back and forth.

Mr Tisi: I'd just like to make, if you'll allow me, one comment: First of all, we realize that the rates will probably go up. As Randy indicated, we have two firms of actuaries who have said they would be going up. We believe it'll be in between what has been brought forward. I don't think we mentioned that the 70,000 members we represent are willing to pay $100 more; if we did, we would be lying. On the other hand, if you look at the insurance industry as such, we are also believers that in a lot of cases there could be a reduction in rates, and that could compensate for some of the increase of what we're going to see with this new bill.

The Chair: Thanks a lot, gentlemen, for coming before this committee. I'm sorry there was a slight delay.

I've got another announcement to make: This committee, when it recesses now, will recess until 2:30. A group has cancelled and we weren't able to get another group in, so we'll be back here sharp at 2:30.

Mr Mancini: Mr Chairman, I have a request: Can we get the Ontario Insurance Commission to come in at 2 o'clock in place of the group that can't come in? I have some questions for them. Can I make a motion?

The Chair: It's a little bit short notice.

Mr Mancini: We can try. I didn't say we were going to force them; I said could we try. I'd like to make a motion that we ask the clerk --

The Chair: With the other subcommittee members, I'll leave it with them.

Mr Mancini: In front of the whole committee, I'd like to make a motion. On a point of order, I'd like to make a motion that the clerk respectfully request senior officials of the Ontario Insurance Commission to come in for a half-hour of questioning at 2 pm so that we don't lose that time, if it is possible.

Mr Owens: I can't support that motion.

Mr Mancini: Why not? All we want is information. Why can we not support the motion? I'd like to know from the parliamentary assistant.

The Chair: Let me just get the feeling of the rest. You see, I changed my schedule for an appointment, with the understanding that we wouldn't come back until 2:30. I will not be sitting in the chair between 2 and 2:30, I can tell you that right now. Maybe some other members also --

Mr Mancini: I appreciate that. Mr Dadamo has done a nice job substituting for you.

The Chair: Who's in favour?

Mr Mancini: I'd like a recorded vote, Mr Chairman.

The Chair: Okay. We get all these recorded votes.


Dadamo, Mancini, Phillips, Tilson.

The Chair: That's four. Who's opposed? Oh, gee. Well, you know how I'm going to vote even beforehand. Mr Mancini: No I don't.

The Chair: Who's opposed?


Haeck, Klopp, Owens, Ward.

The Chair: It's a tie? I'm going to break the tie.

Mr Phillips: I know that, but how?

The Chair: I'm voting opposed. Mr Mancini: You're voting opposed? Mr Chair, with all due respect, you're breaking tradition. Chairpeople vote to carry motions, not to prevent motions from carrying.

The Chair: Well, I won't be here between 2 and 2:30. This committee is recessed until 2:30.

The committee recessed at 1223.


The committee resumed at 1433.


The Chair: Good afternoon. This is the standing committee on finance and economic affairs. This is Bill 164, An Act to amend the Insurance Act and certain other Acts in respect of Automobile Insurance and other Insurance Matters. This is day3 in the afternoon and we're starting at 2:30 with the Canadian -- I'm tongue-tied; I'm sorry. Gentlemen, would you mind introducing yourselves for the purposes of Hansard and the people of Ontario.

Mr David Byers: Yes, thank you, Mr Chairman. My name is David Byers and I'm the executive director of the Canadian Paraplegic Association Ontario, and may I introduce Mr Peter Downs, who is a partner in the law firm of Lerner and Associates and is here as a volunteer. He will be presenting our submission to you, sir.

The Chair: Okay, fine. We have a half-hour. If you could start with your presentation and leave some time at the end for questions from the committee members, you may begin.

Mr Byers: Fine, thank you, Mr Chairman.

Perhaps it would be useful just for me to very briefly outline the services that our organization provides. We are in the rehabilitation service business and the bulk of our staff consists of professionally trained rehabilitation counsellors who typically have degrees in rehabilitation or social work.

We provide counselling services to paraplegics and quadriplegics, everything from financial and housing advice to vocational guidance, and attempt ultimately to find employment for our clients. We have an active case load of around 400, but a total case load of around 1,800 clients. They are typically evenly split between paraplegics and quadriplegics.

Now I turn the submission over to Mr Peter Downs.

Mr Peter Downs: Thank you, David. Before I discuss the views of the Canadian Paraplegic Association Ontario with respect to Bill 164, I'd like to set where the population that is served by the Canadian Paraplegic Association fits into the current system.

As you know, we have what I will term a threshold no-fault system now. The threshold no-fault system actually is a system that probably leaves the population served by the paraplegic association better off than the pre-existing tort system. Paraplegic injured victims would meet the threshold, would be able to sue. In addition to that, they would obviously have the enhanced no-fault benefits under the OMPP.

Bill 164 does not help at all the population served by the CPA. They get nothing from Bill 164 and they lose significantly with respect to Bill 164. The less seriously injured people regain the right to sue for non-economic loss, subject to the $15,000 deductible. The spinal-injured population maintain their right to sue for non-economic loss, pain and suffering. But they're subject to the same $15,000 deductible.

In Canada today, the courts have indicated that the maximum allowed for non-pecuniary general damages, damages for pain and suffering, is approximately $240,000. The limit was set by the Supreme Court of Canada in 1978. Indexed, it's now about $240,000. Under this proposed legislation the amount recoverable would be $225,000. There's a $15,000 deduction of the non-pecuniary general damages for the most seriously injured of our population.

That is not the most serious concern, however, for the CPA. The most serious concern for the CPA is in regard to the aspect of economic loss. Economic loss, broadly speaking, can be divided into two components: the loss of income and what I will term future care costs. The loss of income is of concern to the CPA, as it's a concern, I believe, shared by a number of groups representing a population which I will term the less seriously injured population. The focus of my talk or discussion today won't be on that aspect of it but rather on the other aspect of economic loss, which is the future care cost component.

Specifically, I want to address the issue of attendant care cost. As you are aware, the proposed statutory benefits schedule sets a limit for attendant care costs at $3,000 per month. What that means for the spinal-cord-injured population is that many of them will be institutionalized, because they cannot maintain a life in their own home on their own with attendant care of $3,000 per month. Quadriplegics very often require 24-hour attendant care.

Under the system we have now, the courts have long recognized that. The courts have recognized that the seriously injured, the spinal-cord-injured population, are entitled to be put, as far as money can do so, in the position they had prior to their accident, and that means giving them a quality of life that can best be provided in their own home and not in an institution.

I have attached to my material a schedule -- it's at tab 2 of the material -- which gives, hopefully, the committee members an indication of the amount the courts are assessing for the costs of future care or attendant care. If you look at appendix II, again at tab 2 of the materials, you will see a section entitled "Future Care Costs (Ongoing)." This is a case I was involved in. It happens to be an individual who suffered an injury resulting in C4-5 complete quadriplegia: no sensation, no movement from the neck down.


The court awarded 24-hour attendant care and assessed the cost of that attendant care at approximately $116,000 per year. Under Bill 164, that individual would receive $36,000 per year. The court determined that $116,000 per year was what was required for this individual to live safely in his own home. Under Bill 164, this individual would have to be confined to an institution because $36,000 a year would not be sufficient to allow him to remain safely in his own home.

The present value of the future care assessed under that case, which was under the tort system, was $3.176 million, whereas the present value of the attendant care provided for under Bill 164 -- this is for a 24-year life expectancy -- would only be $652,000, a significant shortfall.

The point is that $36,000 a year will not provide adequate care for many of the spinal-cord-injured in this province and will require them to be institutionalized. Putting these individuals in an institution does not serve these individuals, obviously, and I understand it certainly wouldn't be in keeping with the goal of the Ontario government to reduce the degree of dependence on institutions.

The other feature of the fact that these individuals will be put in institutions rather than be able to live at home is that many of the other benefits that are provided for notionally under Bill 164, such as rehabilitation, equipment benefits, housing conversions and things like that, will in fact only be notional benefits, because what will happen is that the statutory schedule, we fear, will be interpreted by the insurance companies in such a way that these individuals will not be found to be reasonably requiring these extra benefits because they'll be in institutions. There'll be no need for providing benefits for home conversion, because the person cannot live in his own home because he won't have the required attendant care.

You'll see in appendix 2 where we have indicated the notional benefits under Bill 164 for each of these categories of ongoing care, and then there's a column "Amount Payable." You'll notice, for instance, under the tort system in this case that's presented here that the court assessed annual transportation costs of $4,500. Sure, Bill 164 gives "notionally available" $4,500, but one wonders, if the person is relegated to an institution, whether in fact they will be able to satisfy the insurers and the parties who decide these issues that it's reasonably required, since the person is in an institution.

Similarly with equipment, supplies and medical: Being in an institution, OHIP will cover those expenses and there won't be the necessity to purchase those necessities; vocational rehabilitation, similarly.

We can go on with respect to the other items on page 2 of the appendix. Converting accommodations: Again, notionally these are all available, but practically speaking they won't be paid because the spinal-cord-injured victim will not have the opportunity to safely live on his own with attendant care at a limit of $3,000 per month.

There are many recommendations that are made in this paper, but the most important recommendation that the CPA brings forth in its submissions is the recommendation that the limit of $3,000 per month be increased or the limit not be there. There's no limit on the rehab expenses, I understand, there's no limit on the medical expenses and there should be no limit on the attendant care. If it can be reasonably demonstrated that a person requires $6,000 or $7,000 a month of attendant care, then that person should have the opportunity to have that attendant care so he or she can live in his or her own environment.

The paper addresses other issues. I have alluded to the concerns about the prospect that full economic loss will not be recovered again. That will be addressed by other groups, and those are in my paper, but for the purposes of these submissions orally now I think I want to stress very clearly that the attendant care limit of $3,000 is not just, and in any caring and civilized society, I know of no jurisdiction where they have automobile insurance that provides for this type of limit for the most seriously injured of our population.

This is the point: We are increasing the rights by Bill 164 to the less seriously injured of our population, but we are taking away the rights to compensation for the most seriously injured of our population, and I think that is important to realize.

Those are all the comments I wish to make at this time.

The Chair: Okay, fine. We'll go to questions.

Mr Owens: I'd like to begin by thanking you for your presentation. Your organization represents, as you indicate, some of the most catastrophically injured in the province.

Just around some of your comments with respect to the caps, you did acknowledge that the cap that had been in place under OMPP has been lifted under the $500,000 long-term care. In terms of the $3,000-a-month cap that is currently in place, you're aware that there is a task force that has been announced by the minister to take a look at setting standards of care around attendant care, that currently there are no standards in place for attendant care.

My question to you is, in terms of the ability to sue under the OMPP, if one met the threshold, but the lack of immediacy in benefits, do you not think it's more important for a person to get immediate benefits and start on rehabilitation immediately after an accident or as soon as is physically possible for that individual?

Mr Downs: I think that's true, and that's why the current threshold system, as I stated in my opening remarks, was probably better than the previous tort system for the most seriously injured victims, but Bill 164 is a step backwards for the spinal-cord-injured population. I agree that it's important to provide these immediate benefits, especially to those people who make up our population, but you can do that in the present system, and why put this cap of $3,000 a month, which is contemplated in Bill 164, for attendant care?

Mr Owens: Just for the purposes of clarification, the cap, the $3,000 a month, was put on by the former government. We in fact have set up a task force to review that cap in terms of setting standards of care, which are currently not available within the industry. I think, if you chat with some of the folks from the insurance industry and the advocacy groups, there's agreement that standards of care need to be set in order to deliver the most efficacious care to your clients.

Mr Downs: All I can respond to that is that a judge recently, in this case that is presented here, carefully heard the evidence of both the plaintiff and the defence, who were obviously trying to show that this person could be provided for adequately at less cost, considered all that, and in his very comprehensive judgement of 212 pages, obviously not just on the attendant care issue, came to the conclusion that he required attendant care of approximately $116,000 per year. So there's $116,000 per year and Bill 164 is providing for $36,000 per year, a significant shortfall.

The Chair: Mr Winninger, a short question.


Mr Winninger: It's a pleasure to hear from you again, Peter. We've had dealings in the past.

I think we need a little more empirical evidence on this question of rehabilitation and care. I know you've presented one scenario where the judge awarded $116,000. I would question how many cases fall into that category, what average monthly amount of care is required and how the amount required to care for accident victims varies, depending on whether the care giver at home has employment activities or may be of a suitable age to provide care or wants to provide 24-hour care to a spouse or a family member. Surely there are a lot of variables that impact on the cost per month of a case.

Mr Downs: Mr Byers probably has some information on the numbers of population the CPA serves who are quadriplegic. My experience is that by and large almost all, if not all, quadriplegics require if not 24-hour care then a substantial amount of care during the day. That may not be so with paraplegics.

As far as asking the spouse or the individual who happens to be living with the injured victim to provide care, that issue came up in a case I was involved in. The evidence of psychologists and others was that this changes the role of that individual from a spouse, a son or a daughter to a care giver, and it deteriorates that relationship significantly. They're not meant to be care givers; they're meant to be spouses or sons or daughters, and it's very draining on that individual to provide that care.

Mr Winninger: Perhaps you heard me wrong. I wasn't suggesting it should be forced on individuals, but where they volunteer and really want to do it, as opposed to inviting a stranger into the home to provide care, the cost would be lower.

Mr Downs: I think the number of people who would want to get up at 6 o'clock in the morning, administer a bowel routine to a quadriplegic, carry him into the shower and that type of thing would be few and far between. It's a very onerous task. I think if you asked those people who live with these individuals, they would like to maintain their relationship as any relationship in a family that is all able-bodied, and they can't do that in a situation where they're providing the care.

With respect to the figures, perhaps Mr Byers has some information on the number of quadriplegics versus paraplegics.

Mr Byers: I wouldn't argue. There is a variety of course, but the incidence of marriage breakdown, for example, following these accidents is extraordinarily high. Often in today's society, both partners in the situation live independent lives in terms of business and lifestyle, so our organization prefers not to rely on the family. Attendant care is something that's very, very important and that's the thrust. It's a well-known fact that motor vehicle accidents constitute the largest single denominator for paraplegia and quadriplegia.

Mr Mancini: For the record, let me say I was quite surprised by Mr Winninger's question, where he seemed to intimate that maybe the spouses of the victims should take on the role of government agencies, insurance companies or professional care givers. I've never heard that before from the NDP. That's something new. We hear something new every day here.

We also hear there are some hearings that are going to take place after these hearings that are going to solve all the questions and all the problems people have brought forward. I want to say for the record that we've heard that tune and that song before on other pieces of legislation. That's just a way for the government to slough off the tough questions and bury them under the carpet. I didn't think there was any more room under the carpet. They seem to be able to sweep something underneath that carpet every day, whether or not there's room. It's a pretty lumpy carpet indeed.

Let me say that I am aware of the work done by the Canadian Paraplegic Association and I'm impressed by your organization. I've had the opportunity to work with your organization in the past and have the highest regard for you as an organization, for what you do and how you do it.

I knew this legislation was going to be bad for paraplegics and quadriplegics, but I'm stunned by how bad you think it's going to be for these people.

I've been saying all along in these hearings that the right to sue for economic loss, which is being taken away under Bill 164 by the NDP government, is going to be harmful to most people. We've been trying to give examples during these committee hearings, and the retort from government members and some of the witnesses that we've had is: "That's all abstract. We're talking abstract and these things don't really happen."

You've given us a case that is not abstract. I was wondering, for the record, if you have any other specific cases you could talk about in regard to the loss of benefits that people will receive because of the passage of Bill 164. It is going to pass; they have the majority, they have all the numbers. I'd like some specific cases. If you cannot give us the specific cases today, I would respectfully request that when you have time you send them to the committee in care of the clerk and the Chair so that all the members could have those cases.

I would also like to know, while we're getting to the point of benefits and costs, whether you're aware of the fact that Bill 164 is going to drive up the cost of premiums for everybody, even paraplegics who drive, by a minimum of 4.5%, or almost $200 million a year. That's the government estimate. That's the low side. The high side is 22%, I believe.

We had a group of pretty professional people here today representing the teachers. They told us that they thought it would be somewhere in between, maybe 15%. So we're talking about the possibility of a $400-million to $450-million rate increase because of Bill 164 if we hit the medium range of rate hikes. I was wondering, first of all, if you could accede to my request and if you'd give me your opinions on whether or not Bill 164 is worth that rate hike that you and I and everybody else is going to feel.

Mr Downs: In respect to the first request, the cases, I hesitate to bring up any more cases without speaking to the individuals involved, but I'd be glad to accede to the request to provide more information to the clerk.

Mr Mancini: That's fine.

Mr Downs: With respect to the second issue, even if the premiums were not to increase, the position of the CPA is that this is a very regressive piece of legislation for the most seriously injured of our population. This takes away from them significantly.

I suspect that most of the presentations to this committee have dealt with economic loss in the sense of loss of income, but for the spinal-cord-injured, a bigger factor is economic loss in the sense of care costs. I can't stress enough that this $3,000 a month will put these people in institutions and will deteriorate significantly their quality of life. That's the point. Regardless of what it does to the premiums, this is a significant problem with this piece of legislation for the population we represent.

Mr Harnick: I had an interesting exchange the other day with Mr Endicott, who's the deputy minister who was in charge of really writing this generous piece of legislation. He disappeared from the room after we had our exchange, but the long and short of the exchange was to provide him with an example that if a young person, student age, was rendered a paraplegic, a quadriplegic or brain-damaged, under this piece of legislation at the age of 30 years that individual whose whole future was snuffed out, that innocent victim, would be relegated to earning $391 a week.

I'm accepting Mr Endicott's figure because he had some question about the Advocates' Society figure of $388 a week. When he calculated it for us on the record, it worked out to $391 a week. I think that was where he felt he was being pretty generous. That person is going to make less than $20,000 a year, indexed. "Indexed" means that he keeps up with inflation, but he's still below the poverty line.

What my friends across the way don't seem to understand is that the loss of economic rights, the loss of claiming for your actual economic loss is significant. They don't seem to understand that Ontario would be the unique jurisdiction in North America, the only place that's taken economic rights away so that people can't claim their actual out-of-pocket economic losses.

What's very important to me is to have you explain to my friends across the way how significant it is that a person be able to claim his actual economic loss so that he's not relegated to Mr Endicott's $20,000 a year indexed for the rest of his life.


Mr Downs: In the example I provided, the Mortimer decision, initially I put in the schedule the award for his future loss of income because I think it pointed out the inequity in Bill 164. Then on second thought I decided to leave it out because I wanted to focus on this one aspect of Bill 164, the attendant care, but since you've brought up this issue I'll address this concern in the context of this particular case.

This individual was injured in his second year of college, Fanshawe College in London, and he had one more year to complete to graduate from the course to become a certified general accountant. He would article or have a position in a firm. The judge accepted that he was doing well in school. The judge accepted that he would earn, I believe the first figure was $25,000 the first year, and then by the time he was 30 it would be $37,500, and in 15 years he would be up to $60,000 because this was the evidence.

Here's an individual who had a future income loss that was awarded at the present value of nine hundred and some thousand dollars, and it was accepted that he was going to be earning $37,500 by the time he was 30, and later up to $60,000.

Under Bill 164, of course, he would be relegated to 90% of the average weekly earnings, so obviously there's a real example of someone who would be significantly affected in the other aspect of economic loss, which is the loss of income. This case addresses that particular point.

Mr Harnick: Just to carry that one step further so that my good friends across the way can understand it -- I know they don't want to understand it because the minister has told them his bill is the catch-all and everybody is reasonably looked after -- when a person is entitled to claim and recover his actual economic loss when he's rendered a quadriplegic or a paraplegic or brain-damaged, what does that ability to have his income actually permit that person to do that he wouldn't otherwise be able to do?

Mr Downs: Obviously, the increased source of income will let them purchase greater amenities for themselves and increase their quality of life. It's all the more important for the more seriously injured of our population to have the greatest resources available to them, because obviously their quality of life is impaired significantly by their disability, and whatever they can obtain in other realms through increased resources will be a benefit to them.

It's particularly distressing for people like Stephen Mortimer or other spinal-cord-injured victims who have, through their efforts, been able to achieve a certain level of income, been innocent victims of an accident and have that taken away from them and not be compensated fully and not be able to purchase those amenities that will help them maintain a better quality of life.

Mr Harnick: Bill 164 essentially relegates that individual --

The Chair: Mr Harnick, I've got to cut you off there.

Mr Harnick: -- to a bare subsistence, right?

Mr Downs: True.

Mr Harnick: Thank you.

The Chair: We've run out of time and we'd like to thank you for appearing before this committee.


The Chair: The next group coming forward is State Farm insurance, Mr Harry Brown, I believe, and colleagues. Welcome to the standing committee on finance and economic affairs. Take a seat. We have half an hour. In that half an hour, if you can leave some time at the end, as you can see, the members of the committee are anxious to ask you questions.

Mr Cliff Fraser: We look forward to it.

The Chair: If you don't mind identifying yourself and your colleagues, you may begin.

Mr Fraser: Good afternoon. My name is Cliff Fraser and I'm speaking on behalf of State Farm Mutual Automobile Insurance Co. In 1970, the Insurance Bureau of Canada set up a no-fault committee which I chaired. I have stayed close to the subject ever since that time and also served as an adviser to Justice Coulter Osborne during the government study on automobile insurance in 1988.

I have with me today Greg Hayward, our actuary responsible for our Canadian automobile business. Mr Hayward is a fellow of the Canadian Institute of Actuaries, and Mr Hayward has been active in Bill 164 consultations with both government and the Insurance Bureau of Canada actuarial committee. Also with me today is Ontario lawyer Harry Brown of the law firm Iacono, Brown.

Rather than read our written submission, which I hope you have, in its entirety, I will instead focus on the highlights of our concerns this afternoon to ensure there's adequate time for any questions the committee may have.

State Farm has been providing Ontario drivers with insurance since 1938. As of today, State Farm insures approximately 524,000 vehicles in Ontario. State Farm has over 300 agents in this province, who are supported by another 1,700 State Farm associates. Quite clearly, State Farm has a huge stake in the continued vitality of the automobile insurance marketplace in Ontario. Bill 164 threatens this vitality. Bill 164 substantially increases the cost of automobile insurance and thus takes a bigger bite out of the consumer's pocketbook.

Ontario automobile insurance consumers were subjected to significant increases in premiums until 1990. The introduction of a strong verbal no-fault threshold for personal injury claims plus a balanced system of first-party benefit payments allows the industry to provide the consumer with an automobile insurance product that is understandable and quick to provide compensation.

Auto insurance consumers in Ontario have clearly benefited from rate reductions and dividends. In fact, State Farm reduced auto insurance rates by an average of 8% in February 1991. This represents an annual saving of $25 million per year. Also, State Farm paid a dividend to its policyholders in December 1991 of $32.5 million. That's actual money we refunded to our customers. From the consumers' perspective, this turnaround in the auto insurance marketplace was from one of substantial rate increases to one where rates could be reduced and dividends paid. It certainly is worth preserving. Polls taken by COMPAS Research found that 76% of customers are satisfied with the current system.

Ontario Bill 164 will reverse the progress made over the last few years and impose new, additional cost burdens upon the consumer. If Ontario Bill 164 becomes law, the price of automobile insurance will go up substantially. Bill 164 would impose a very complex and difficult-to-administer auto insurance system upon the drivers of Ontario.

Everyone, including government, has agreed that Bill 164 would result in an increase in the cost of insurance in Ontario. There is no dispute regarding that fact. Various analyses have suggested different figures for a rate increase resulting from Bill 164, but all interested parties recognize that Bill 164 is more expensive than the current Ontario motorist protection plan. Polls taken by COMPAS Research found that 89% of consumers opposed Bill 164 if it would mean they must pay 15% more.


Exhibit 3 of our brief dramatically demonstrates that Bill 164 will cost more than the current system. It contains four actuarial studies, including the government's own Mercer study. The Mercer study shows Bill 164 increasing personal injury costs by 13.3%. Please note that about 20% of all drivers do not insure their cars for collision coverage, and they will receive the largest percentage increase. I might point out that a lot of those good folks are senior citizens who have paid off their car, they don't drive to work during the rush-hours and things of that nature and they take a chance on collision. Even by the government's own study, those good folks' rates are going to go up 13%.

Exhibit 4 shows the dollar magnitude of the increases for typical State Farm households in various cities in Ontario. They range from a high of $242 in Toronto to a low of $150 per year in Ottawa. There would also be substantial increases in Hamilton, Windsor and other such cities across this province. Surely no consumer-minded government would impose these kinds of increases on the consuming public.

State Farm did retain Coopers and Lybrand to analyse Bill 164. The first study was released by us last October and these were some of the brief conclusions: increased costs and hence premium increases by 20%, or $565 million per year across the province; it would make women and older drivers pay substantially more for automobile insurance due to reclassification of risks that will lead to unfair consumer cross-subsidization; it will eliminate choices for consumers; it will raise operating costs for companies, obviously, and result in employment reductions and possible bankruptcies of insurance organizations; increase access to tort and higher cost settlements, which will unduly increase costs; encourage capital flight as a result; this will send a signal to investors that the governments' freeze-and-squeeze regulatory framework makes Ontario an unattractive place for investment.

State Farm has also commissioned Coopers and Lybrand to do an actuarial analysis of the government Mercer report, and you should also have that exhibit. That analysis, entitled Evaluation of the Impact of The Road Ahead on Rate Levels for Private Passenger Automobiles, has been released to the public today. The Coopers and Lybrand analysis found the assumptions of the government's New York consultants to be seriously flawed. Coopers and Lybrand indicates the increase in personal injury costs to be closer to 33.3% rather than 13.3% and that increase for all coverages will be at least 15%, not the 4.4% Mercer states.

I repeat that for the 20% of drivers who don't carry collision and just carry the people coverage, that's going to increase their insurance rates by a third, according to our calculations, and even by the government's calculations by 13%. You can work out some mathematics and figure that the average premium across the province is around $800.

Mr Hayward, our actuary, will be happy to expand on the actuarial analysis of Bill 164 that we've just given you when I've finished speaking.

Even without going into further actuarial details, however, it should be obvious that doubling and tripling the following benefits will cost the consumers much more: tripling the number of people who can be sued and required to pay for pain and suffering awards; doubling the death and funeral benefits; increasing the wage-loss benefit by 70% so the working poor will subsidize high-income earners; expanding the benefits for students, the unemployed and the self-employed; continually increasing benefits by indexing them to the consumer price index; and, finally, lifting the caps on accident benefits coverage to provide lifetime benefits with no dollar limitation.

Not only will the increased benefits and the increased right to sue cost consumers more, but the government's proposed uniform rate classification system will drive premiums even higher. Under a uniform class plan, good drivers will subsidize bad drivers in a system which has no basis in sound actuarial practice.

Exhibit 5 provides a graphic illustration of the cost increase that will result from the proposed plan. Please note again that seniors, young women and young married couples will be the hardest hit. We estimate that at least 80% of State Farm policyholders across this province will pay more under the proposed system.

Our recommendation is that Bill 164 and the accompanying regulations should not proceed further in the legislative process. It is seriously flawed, primarily due to the increases in cost consumers must pay. Consumers have clearly voiced their satisfaction with the current system where rate reductions have occurred. Consumers have voiced their opposition to paying more for Bill 164.

Our written submission, Mr Chairman, expands on the concerns I've just voiced. Thank you for the opportunity to comment. State Farm wants to preserve an automobile insurance system that allows us to provide the best combination of coverage, service and price. We would be pleased to answer any questions.

The Chair: There was one item I wanted to straighten out. Mr Harnick had mentioned Mr Eric Endicott; he's actually senior legal counsel for the ministry. So we'll go on to Mr Mancini.

Mr Harnick: My humblest apologies.

Mr Mancini: Good. Now that we know Mr Endicott's appropriate title and whatever else he does, we all feel that much better.

I want to ask the officials who have taken time to be with us today whether or not they're aware that they've joined a long list of witnesses who have appeared before this committee. Witness after witness, organization after organization have come forward to tell the government members that Bill 164 will raise rates. I wonder if you're aware that you're not alone in this view.

Mr Fraser: Yes, Mr Mancini, I have been here quite a bit of the time. I've also watched it on the network. We ask ourselves many times who the constituency is, frankly, that this legislation is supposed to appeal to. We find NDP members don't like it. We find lawyers don't like it. We find insurance companies don't like it. We find the paraplegic group that just got off here doesn't like it. We know our policyholders don't like it. I'm not sure who that constituency is.

Mr Mancini: Today we found out something new. Every day on this committee we find out something new from the government members as to what their agenda is, and one of the government members -- I believe it was Mr Johnson, if I'm correct -- indicated today that there would be no premium rate increases to the consumers. He indicated today that the insurance industry would absorb the cost of Bill 164.

I'd like to know from you whether or not you believe that the industry can absorb the increase in cost because of Bill 164, and whether or not you've been told that by the minister or Mr Owens, the parliamentary assistant, or Mr Endicott, who seems to be the bureaucratic lightning rod for the government, if you've been told in any of your meetings that that is what's going to happen.


Mr Fraser: We have not been specifically told that. The Honourable Brian Charlton has inferred that there could be some kind of rate freeze at some point. Yes, we have made profits in the more recent years. I think it's very good that some industries in this province are profitable, are solid and still in business and not laying people off.

Mr Mancini: There's not many left.

Mr Fraser: There's not many left, and if claims are presented to us, we want to be in a financial position to meet those obligations, and some of those obligations go on for decades. Next to banks, we are possibly the most controlled industry from a financial standpoint by Ottawa and the various provincial jurisdictions. If rates were artificially constrained, it would place hardship on insurance companies where their future obligations may be impaired and policyholders could find insolvencies occurring down the road. You definitely could not use up your surplus, which is there for growth, and with Canada's increased immigration and things like that, folks coming to Ontario, we have to write additional business, and you need a sound financial base to do that.

Mr Mancini: I've been saying to delegations and to members of the committee that the previous regulations, which were 18 pages, was a document that the industry and the brokers and everyone else associated with insurance could live with. I've also been telling everyone that the 68 pages of regulations that have been tabled along with Bill 164 are unintelligible to the average person, to the brokers. We've heard other groups come in who say that they are experts in the field and they cannot understand these regulations.

You've told us today that State Farm Insurance is the biggest insurer of automobiles in Ontario, so I would assume you have quite a bit of experience and a great deal of expertise in understanding regulations and I'd like your opinion on these 68 pages of regulations.

Mr Fraser: Just a correction, Mr Mancini. We are the third-largest auto insurer in Ontario. Frankly, the top three are within a decimal point apart. We are the largest auto insurance company in the world.

The regulations frankly are incredible. I've been in the business 40 years. I've read those regulations and the ones that preceded them, which were some 70-odd pages, late into the evenings. I do not understand them.

But I would like to ask our lawyer, which I am not, who makes a profession of reading that kind of complicated material, to comment on that. Mr Brown.

Mr Harry Brown: I'm in a conflict here. If I say I don't understand it, there won't be any more work available. But I guess the reality is that the new draft regulation, even the user-friendly version we've just seen, the 67-page one, is extremely complicated and lengthy and difficult to understand from anyone's perspective, and I'm talking even from my own legal perspective. The president of the Ontario trial lawyers' association has told me that he thought it read like the Income Tax Act. That was the previous 70-page document, not the 67-page document, but there isn't a dramatic difference. You contrast it with the present regulation, which isn't simple, but it's relatively simple to understand and deal with.

I think you've heard before you the problems of an injured person getting a 67-page document, plus the other portions of the policy when he has an accident, plus the accident benefits forms, and he's told, "Here, go make your claim." The problem is, the first thing you're going to do is say, "My goodness, I'd better get a lawyer." You're going to increase transaction costs on the injured consumer side to help walk them through this myriad. 1hen you're going to have the insurance adjuster saying, "I'm not sure where I should place this person." They could be at once a care giver, they could be working part-time, they could be going to school in a certain way. Where do they fit in? Which election do they make? Do they do a lump sum? Do they go through the three- and eight-year mandatory reassessment process? The adjuster gets legal counsel, and what you have is increasing transaction costs built up in the system, plus the frustrations.

That has to be understood in the context of what you're doing. If you're going to deal with the administrative efficiencies of amending this process, the better thing to do, in my respectful view, is to consider amending Bill 68 to provide for any new benefit coverage you think is appropriate, the reason being that you have this very complicated statutory accident benefits schedule to deal with in the context now of three different regimes of automobile insurance. You've got the tort plan, which is still having runoff of cases -- and I've a 12-person law firm doing nothing but insurance, by the way, so we know this.

Mr Brad Ward (Brantford): Still going through the courts?

Mr Harry Brown: Still going. We have maybe 1,000 files in our office. The old tort system, including some of the old no-fault benefit cases, are still running off.

Mr Ward: They never get paid right away.

Mr Harry Brown: I didn't say it was a good system.

The Chair: I'm sorry. Talk to the Chair, please.

Mr Harry Brown: I'm sorry, sir. I'm just getting questions from your own members.

You have the OMPP system, then you have a totally new system, the Bill 164 system. So you have the problems of dealing with the very complicated document in the context of three systems, with the inevitable overlapping of claims. The result is going to be that you're going to have a very heavy transaction cost to the insured person, the consumer, who pays out of his or her own pocket to the insurance company, which simply pays it and seeks a rate increase to pay for it. So on the basis of an efficient system, which is defined as being the least transaction-oriented system, the least costly transaction-oriented, this is an administrative nightmare.

The Chair: Mr Harnick. Both of you should understand the questions and the answers then.

Mr Harnick: I never understand Harry.

Mr Fraser, I think one of the problems is that we have a government that's amending something, I think more for the sake of saying, "It's ours as opposed to theirs." It seems to me that, as people have indicated, this is going to be a nightmare for lawyers to deal with. It's going to be a nightmare for insurers to deal with. It's going to be absolutely deadly for consumers to deal with.

We also know that the costs, based on your studies and even based on the Mercer studies, are going up somewhere realistically between 20% and 30%. We see at the same time that the costs are going up, situations where in fatal accidents people aren't going to be properly provided for, and I'm sure you'd be the first to acknowledge that Bill 164 is downright miserly when it comes to looking after dependants, probably paying a fraction of what the OMPP would pay in a fatal accident.

We also saw that a student who would be rendered unable to work as a result of an accident would be living on the poverty line for the rest of his life, based on what Bill 164 would provide. Yet the major criticism of the OMPP was the high threshold and it's been suggested that we include psychological injury specifically as well.

What I want to know very briefly is, if the OMPP were amended to lower the threshold so the injury didn't have to be permanently serious, but only permanent or serious, would you agree with me that the increase in premium cost would be about 10.5%?

Mr Fraser: I'll ask Mr Hayward, our actuary, but first I want to speak in general terms as an insurance person. When the FAIR group was here, Professor Carr, I believe the name was, made the statement that the insurance industry supports pure no-fault, which would be the Quebec program. Forget the fact that it's run by government.

Now that is absolutely incorrect. The insurance industry supports a threshold no-fault system. State Farm particularly supports a threshold program where those catastrophic injuries -- those people have traditional access to tort for economic loss and pain and suffering, where it has the compassion and the individualization of the judicial system to personalize the judgements. All we're talking about is where you draw that line and that's what you're coming to. I'd like Mr Hayward to --


Mr Harnick: I don't want you to think that I'm setting you up here. I don't want to jump in and say, "Ah, you're wrong, I've got other information." The insurance bureau has indicated that it would cost about 10.5% more to provide coverage for psychological injuries on a lower-threshold basis. It seems to me that's about a third or a half --

The Chair: Mr Harnick, don't you want an answer?

Mr Harnick: Just let me finish the question.

The Chair: I don't hear a question.

Mr Harnick: That's about a third or a half of what the government's costs are going to be under Bill 164 to consumers, and we're going to get so much more.

The Chair: If I don't hear a question, I'll go on to the next.

Mr Harnick: Can you respond to that?

Mr Greg Hayward: Yes, I believe your statement is consistent. I have been heavily involved with the actuarial committee of the Insurance Bureau of Canada and I believe that is consistent. Basically, dropping the requirement that the injury be physical in nature is the key phrase that's in the threshold today, and I have -- yes, you've handed me the analysis. So I think that is consistent.

Mr Harnick: It just seems to me that by doing that, the costs are going to go up by 10% versus 20% or 30% under Bill 164.

The Chair: Mr Harnick, I'm sorry. Mr Owens.

Mr Owens: Thank you, Chair.

Mr Harnick: Right, Cliff?

Mr Fraser: You just said it.

Mr Harnick: Thank you.

Mr Fraser: We agree.

Mr Owens: My first question is to Mr Hayward on the report that was presented today. When the analysis, this report, was prepared, did you or your committee go back to the original data and do an actuarial analysis, or did you look at the Mercer report and simply, as actuaries, do a report on an actuarial report?

Mr Hayward: We've been doing both. This legislation's been around for about 13 months now and --

Mr Owens: But in terms of this document.

Mr Hayward: Yes, I'd be happy to address that. In terms of this document, what we asked Coopers and Lybrand to do was to try to reconcile the differences between the numbers that we were coming up with and the numbers that Mercer was coming up with. With all due respect to Mercer, we came to the conclusion, and asked Coopers and Lybrand to study this independently, that there are some inappropriate assumptions in there.

For example, the road safety plan that is included in the Mercer study: They've assumed that the intended road safety programs -- I say "intended" -- will impact Bill 164 only and will not impact the current system, the OMPP. Any road safety programs would affect either system, not just Bill 164. That has an effect. It tends to underestimate the cost.

Also, another item: The use of Quebec data is very questionable, whether those should be used in any actuarial costing in Ontario. Clearly, Quebec is a different system, a different environment than Ontario. Mr Khury, in his statements to the committee, tended to downplay that by saying it only had a 2% impact in the overall cost, but that 2% amounts to about $70 million in increased premiums for Ontario consumers, so that's an important fact.

Further, Mercer assumed a July 1, 1992, effective date. We're now sitting here in January 1993. That assumption cannot be correct. That underestimates the trends, it underestimates the indexation clauses that are in Bill 164 and further underestimates the costs.

Lastly, one further item on what are the differences between Mercer and the other actuarial studies, and Mr Khury alluded to this when he was talking about the economic loss benefits. The Mercer study concludes that the economic loss benefits under Bill 164 will be less than the economic loss benefits that are under the current package. A doubling of benefits under the 67-page accident benefit schedule: they come to the conclusion that all of those increased economic losses will in fact be less than what is in the current system.

Mr Owens: In terms of your comments around the regulation, the Liberals contend that their 18 pages covered all victims, when in fact they substantially left out a large proportion. We talk about insurance programs having gaps; we're not talking about the kinds of gaps you can drive a truck through backwards in terms of those that don't quite meet the test of either being dead or permanently and seriously disabled.

I'd like to direct my next question to Mr Fraser. I'm pleased that you're profitable; $70 million, I believe, was the figure that you reported in a press conference. Is that correct?

Mr Fraser: I can comment on that. Our books aren't closed yet. Obviously, it's still January. They allow individuals till the end of April, and it takes a corporation a little bit of time. That would be investment income, between $70 million and $80 million for Canada. I cannot isolate investment income by province; it's spread all over the place. But that's not necessarily profit, because half of that goes in income tax.

Mr Owens: How do you reconcile the differences in position between yourself, as State Farm, and the Insurance Bureau of Canada, where the IBC has indicated that it has some difficulties with the legislation but is willing to sit down and is involved in the task force? How do you reconcile those differences? How can you be so far apart from the organization that represents insurance companies?

Mr Fraser: We are not far apart. I think you took a few liberties in indicating that they have a fairly soft position. I am a director of the Insurance Bureau of Canada, I have been a member of the steering committee and I've worked with government in every meeting, so I've been very much involved.

By nature, trade organizations from time to time take more of a generic kind of a position because they represent 150 different insurers, but the Insurance Bureau of Canada is dead set against this legislation. Their preferred position would be that it be withdrawn. If it cannot be withdrawn, naturally we want to work with government to try to improve it, and that's State Farm's position also.

The Chair: Okay, fine. Time has run out.

Mrs Caplan: I'd like to move that the parliamentary assistant, Mr Owens, have five more minutes to continue his line of questioning.

The Chair: Sorry, I'm going to overrule that because we're behind already.

Mrs Caplan: That's a motion.

The Chair: Okay. Unanimous consent? No? See, they understand the Chair.

Mr Phillips: Mr Chair, there may be an omission that I wonder if they could clear up for us, and that's on page 16 of this document. It indicates here that seniors over 65 years of age, many of whom live on fixed incomes, could face a 24% increase in their rates. Could that be the case, Greg? It's almost unbelievable.

The Chair: They'll be able to explain it to you out in the hallway, Mr Phillips.

Mr Phillips: So it is true? Okay.

The Chair: I'm sorry, time is up, and I know the chamber of commerce is just waiting. I see a good friend of mine, Don Eastman, sitting back there, so thank you.

Just before I go on to that, I have to have unanimous consent that Cam Jackson is substituting for David Tilson, who's gone home sick.

Mrs Caplan: You need unanimous consent?

The Chair: Agreed? Okay. Cam, welcome to the committee.



The Chair: I'd like to welcome the Ontario Chamber of Commerce, Mr Don Eastman, vice-president, and Ms Linda Matthews, past president. Welcome to the committee. We have one half-hour. In that one half-hour, if you can leave some time at the end of your brief, as you can see, the members are anxious to ask questions. They'd love to ask questions for an hour here. Go ahead, please.

Mr Don Eastman: The Ontario Chamber of Commerce represents 65,000 businesses across the province. We're an association of 172 local chambers of commerce and boards of trade and we represent every type of business in the province from small, family-owned establishments to large international corporations. Our membership represents a majority of the private sector jobs in the province.

We're here to comment on this bill partly on behalf of our insurance industry members, but primarily on behalf of our other members who will be affected by this legislation. They'll be affected both in terms of direct insurance costs and in terms of how this bill affects the overall business climate in Ontario.

The Ontario chamber believes that there are issues surrounding this legislation that go beyond the effects they have on the insurance industry. We are eager to see that everyone's needs -- business at large, the insurance industry, the public and accident victims -- are properly considered and addressed. All of us want low-cost auto insurance that provides fair and prompt compensation to accident victims without having adverse outside impacts. Bill 164, as drafted, raises some disturbing questions for us.

A substantial portion of the total traffic and highway usage in the province relates directly to business activities. If transportation costs are increased through higher insurance fees, these will simply add to the cost burden that is already costing this province jobs.

The Ontario chamber agrees that changes to the Ontario motorist protection plan are warranted. The government should endeavour, in cooperation with the industry, to ensure that victims of auto accidents are treated with fairness and dignity, balanced with cost and affordability. However, we believe that Bill 164 does not achieve this.

We note with concern that a recent study estimated that the expanded benefits package proposed in Bill 164, along with increased administrative costs for the insurance industry, could drive premiums up for Ontario drivers by an average of 20%. We've heard numbers that start at 5% and most of them seem to escalate quickly to the 20% range. We believe, both as businesspersons and as private buyers of insurance, that such increases would be unacceptable.

The current system of auto insurance in Ontario seems to be working relatively well, with premiums having stabilized and claims being settled more quickly and efficiently. We're concerned that Bill 164 appears to take us away from that progress.

We feel that this legislation suffers from being pushed ahead, perhaps because of political considerations rather than any demonstrated economic need. It's imperative that the government allow careful study and time to judge the current system. It would greatly assure our members if the government could clearly show that our auto insurance costs are not at risk of skyrocketing due to Bill 164. We have not been reassured during these public hearings.

One component of the cost issue is the legislation's complexity. Legislation that is excessively complex may provide a comfortable haven for lawyers and bureaucrats, but for the rest of us it represents a substantial cost burden: wasted money when there is already too little for doing things of value. We understand that this complexity could translate into the need for perhaps an additional 100 civil servants and $5 million in additional annual administrative costs if implemented. None of us can afford legislated inefficiency.

Beyond our obvious concerns about the impact of the proposed legislation on the costs of auto insurance, we're also troubled by the signals that Bill 164 is sending the business community as a whole regarding this government's understanding of the province's business environment. We're in an era that requires governments to understand that they're part of a global economy. It doesn't take much of a look around the world to understand that governments that attempt to hide behind walls of protectionism and regulatory barriers are soon left behind.

Despite recent amendments to the withdrawal provisions of the bill, the bill that is in front of you still devotes much effort to restricting the ability of insurers to leave the marketplace. The concern is, is the government so concerned that Bill 164 may drive insurers out of the marketplace that it needs to restrict the right of insurers to make a purely economic decision?

This type of action does nothing to boost investor confidence in Ontario. It sends a strong message to investors and trading partners that there is a risk that the Ontario government will not allow them to control their own business affairs and make their own decisions, and that if an investor does choose to invest in Ontario, it faces a risk of having its investment held virtually hostage. It's important to learn from the experience of others. Both Massachusetts and New Jersey passed similar types of provisions on withdrawal. It's resulted in insurers leaving those states anyway, triggering costly legal battles. There are better ways to spend taxpayers' money.

The Ontario chamber is also concerned that Bill 164 would give the Ontario cabinet the regulatory power to initiate changes to the insurance class plan and rating methods. It's part of a disturbing trend we've seen in government to cut off public and parliamentary debate in areas of public concern.

In the case of auto insurance, we feel that the government needs to ensure the involvement of all concerned parties when making important decisions regarding changes to such items as the risk classification system. There's no question of the need for a regulatory path, but it needs to supplement the public policy arena, not supersede it.

Auto insurance is a complex and technical product. We're concerned that empowering the cabinet to make decisions on auto insurance will mean that auto insurance will turn into a political football. It's our opinion that regulatory powers should rest with the experts at the Ontario Insurance Commission, making full use of the technical knowledge base of the insurance industry.

The Ontario chamber urges the committee to look at Bill 164 in a broader context. We are very supportive of establishing a road safety agency, as proposed in Bill 39, that would concentrate on convincing motorists that driving in a dangerous manner is not socially acceptable. The best solution for our auto insurance problem is to reduce the number of accidents, reduce the number of victims. We need to use innovative social instruments to change attitudes regarding dangerous driving as a means of achieving low premiums on auto insurance and improving the capability of the system to respond to the needs of victims.

Establishment of a road safety agency could reduce the number and severity of auto accidents and lead to a decrease in insurance costs. We would like to offer the support of the Ontario Chamber of Commerce and our network of community chambers of commerce and boards of trade across Ontario to ensure that this initiative bears fruit.

In conclusion, we feel that Bill 164 does not address the fundamental need for reform to the Ontario motorist protection plan and it does pose an unreasonable risk of increased auto insurance costs to both our members as consumers and the insurance industry in Ontario.

The government should consider initiating such road safety measures as the graduated licensing system and stricter enforcement and penalties for drivers convicted of dangerous driving. It should work with the insurance industry to identify weaknesses in the present system and initiate improvements, without higher costs to Ontario's auto insurance consumers.

Thank you for this opportunity.


Mr Harnick: Seeing as you're a chamber of commerce and, I gather, represent a lot of small businesses in Ontario, I wonder whether you're aware of the fact that if a small business person is involved in an accident, he cannot claim his actual economic loss beyond what the prescribed benefits are going to pay him.

If his business shows that he's drawing very little income out of it, he gets a benefit based on whatever income he's drawing out, or a percentage of whatever income he's drawing out, and in the meantime, as he sits at home trying to recuperate and is starving, the business goes bankrupt. It's a business that you might be able to prove, based on accounting numbers, was growing and it was very close to the point where it was going to be prospering, so that the individual's income might be two, three, four, even five times what it was at the time of the accident, but all that person can get are those prescribed benefits.

What's your position in so far as the right of individuals to claim for their actual economic loss, beyond what the accident benefits pay, is concerned?

Ms Linda Matthews: Certainly, Mr Harnick, that's one of the areas where our members are concerned and one of the areas where the current OMPP product is lagging. It would be one of those areas that we believe could be improved under the current OMPP so that some additional consideration could be made for the cost of running that business while the self-employed person is disabled. There may be an opportunity or a need to charge that businessperson an additional premium for that coverage, but it's an area that could be addressed under OMPP.

Mr Harnick: You see, as this proposed bill reads, it will be against the law for anyone to claim for his actual economic loss. Even if the insurers wanted to offer additional coverage, they couldn't do that unless the bill was amended so that we could then go out and buy income protection --

Ms Matthews: That's right.

Mr Harnick: -- which I suspect would be something the insurers might want to sell; it's another product. Those of us who want to protect our income would at least have the opportunity to do it. Is that something that you, as a chamber of commerce, would think would be to the benefit of all income earners who want the opportunity to protect their income?

Ms Matthews: It is definitely of concern to our members and something we feel is not provided under Bill 164.

Mr Cameron Jackson (Burlington South): Just a quick question: In your survey of all your member chambers in Ontario, in the process of formulating all your input, did you have any individual chambers come forward to indicate support for Bill 164?

Mr Eastman: We did not.

Ms Matthews: Not that I'm aware of, no.

Mr Jackson: Was there any element of the bill where there was a consensus of support on a provision of the bill?

Ms Matthews: Not that I'm aware of. We were sitting listening to some of the previous presenters as well, Mr Jackson. From our understanding, certainly our members are not happy with this piece of legislation. We've heard others say that their membership is not happy with it either.

Mr Jackson: One final question has to do with your referencing of the hijacking the transfer of capital and the movement of capital for any enterprise in our jurisdiction. Do you think this might be the beginning of activities that could include, for example, restrictions on the movement of your RRSP moneys and other pension benefits to other provinces and so on? Is that part of your concern? Can it lead to a whole series of non-portabilities of your equity?

Mr Eastman: If I can comment, there's an issue of principle here in terms of just what can be done and is appropriate to be done. Once the principle is breached, as this bill breaches it, it raises a real concern of, when is the next breach going to take place? What will happen next? What is the level of comfort you can be assured of?

Mr Klopp: Good afternoon. It's a pleasure to be here. I appreciate you comments.

On page 4, you made reference to provisions of the bill to hold up companies if they wish to get out of the insurance business in Ontario, or even out of an area. I don't know if you're aware of the amendments to the act that are taking place. In fact, the commission is only asking -- and I think it's only fair -- that a company wishing to get out give 180 days' notice. Further to that, when the commission reads it over it may ask for a further 90 days' delay, just for the people of Ontario, and especially for the people of insurance companies, but indeed not stopping them from leaving. I don't know if you're aware of that amendment.

Ms Matthews: We were aware that there had been amendments made, Mr Klopp, but there's still the philosophical issue of the rights of a business to make decisions based on economic factors and the interference in that process. There are still, I believe, penalties and fines. No? Then my information isn't right.

Mr Klopp: That comes, I think, from what you've talked about earlier, that this government is indeed consulting with the business community in this particular area plus in so many others. But also there are the people they do serve; ie, if I have insurance with a company I think it's in my right and I'm glad there's a provision that at least they give notice, to the public good of 180 days, at least, to know that I may or may not have insurance. They're going to leave, of course. So I just wanted to make that clarification on that.

Further, you made some comments earlier in the first part here. The chamber agrees that there should be changes to the motorist protection plan. I have chamber of commerce people I'm aware of, and like so many others, they're still individual people. A lot of us have insurance or lots of things that we buy and then we find out when we hit somebody -- that's when we read the fine print. You made the statement that there should be changes made. Could you expand on where those changes should be?

Ms Matthews: We addressed one area of concern of our members earlier, and that's with respect to the small business persons and the ability to recover the cost of running their business as an ongoing entity even though they may be involved in an auto accident.

Mr Klopp: Which they can't in this.

Ms Matthews: I think certainly too that the OMPP itself could be improved with the indexation of benefits as an area that is addressed. But when you get into the area of things like unlimited liability by removing the caps on rehabilitation and home care and issues like that, you get into very expensive provisions under Bill 164 that are the very reasons that we are therefore concerned about the increase in the cost of that product. It seems to me that unlimited liability is not available in other types of accidents and provisions, and that it seems to be an area that would cause the product to almost be unpriceable because you no longer have control of what your potential costs may be.

Mr Klopp: That's a concern that we've been carrying through, even in our whole process of changing this. Groups have come in here already and said we haven't gone far enough. When we've had clients who have said, "You should even have more coverage for us," we've been trying to strike a balance.

Ms Matthews: Sure.

Mr Klopp: In dealing with groups that are in the business they said that yes, you can have everything, but it's going to cost X amount of dollars over here. Being in a business like myself, maybe if I can go back to my own business, I want the best tractor. I have to work --

Ms Matthews: Affordability.

Mr Klopp: -- out what I need but I still need a tractor.

Ms Matthews: That's right.

Mr Klopp: I think that's where this balance has been working and it's an ongoing process. I appreciate your comments. Thank you.

Mr Phillips: I appreciate very much the chamber's perspective. I think you have your finger on the pulse of the economy, perhaps as well as anybody.

Everything I've heard so far on this bill -- I think we can now feel fairly confident that it's going to cost the people in Ontario $500 million. That's what it's going to take out of the pockets of the people in Ontario.

We hear right now that the government cannot afford, and understandably, to give the schools any money -- zero money. The schools will get no grants. The hospitals will get nothing. But for every single individual who drives a car in this province, rates are going to up dramatically. It is perhaps, in my opinion, one of the most regressive taxes because no matter what you earn, your rates are going to go up. It's going to take out of the pockets of the people of Ontario $500 million.

I don't think the NDP has any idea. It's sort of like this is all just coming out of nowhere. They don't understand that the people of Ontario are going to have to take out of their pockets -- we saw today that the seniors living on fixed incomes, the people who phone my office and say, "We've had enough," their rates are going to go up 24%.

What I'm leading up to with the chamber is, what sort of environment are we facing out there right now and how much should we worry about taking $500 million out of the hands of the consuming public and the taxpaying public?


Ms Matthews: It's certainly a major concern with respect to an economic recovery in this province. It's money that certainly could be better spent on consumer goods and products and in other areas, so it's a concern on a dollars-and-cents basis. It's also a concern, as we mentioned in our brief, on a philosophical basis as to what it does to business confidence, consumer confidence given the fact that costs go up and up and yet they are faced with no job or frozen wages or fixed incomes or whatever. It's certainly a concern to confidence.

Mrs Caplan: My constituents in Oriole are concerned that this piece of legislation is going to cost them more and it's not going to mean that they're going to get anything, really, for that money. Many of them are worried about their jobs tomorrow, the uncertainty that you've spoken about.

What we've heard you say is that the present plan seems to be working well -- that's what you said in your brief -- and that your advice to the government would be to study that for a while. Do you think this bill should be withdrawn and nothing should happen, or that this bill should try to be amended? What do you think would be in the interest of my constituents in Oriole who are worried about having to pay more for auto insurance? There are a lot of seniors, a lot of working-class people who have to drive a car.

Mr Eastman: In our opinion, the best option would be to withdraw the bill and consider the appropriate changes to the Ontario motorist protection plan.

Mr Mancini: Good.

The Chair: One minute left.

Mr Mancini: I have a question. I'm quite concerned about the attitude the government members have towards profits. We are in the middle of a three- or four-year recession, the longest and the worst since the Great Depression. Any time anyone mentions the word "profits," we get interjections and cackling from the government members, as if they don't need companies to make profits so they can be taxed so they can help pay down their deficit. I was wondering, in your dealings with the government ministers and other senior officials in the government, do you still find that they are abrasive towards the attitude of private corporations making some profits in this province?

Mrs Caplan: They sort of think "profit" is a four-letter word, we think.

Mr Klopp: What it has to do with this bill I'll never know.

Mr Mancini: It has everything to do with it, because Mr Johnson was here yesterday, cackling about profits.

Mr Phillips: What has it to do with profits? You say that you're going to take another $500 million --


The Chair: Don, talk to the Chair. I'm shutting their mikes off on either side.

Mr Eastman: I think profit is a tremendously important concept.

Mr Klopp: So does our government. We agree with that, too.

Mr Mancini: Oh, go on. How come you're all laughing and cackling about it?

Mr Eastman: The profit concept is what really makes the difference between what permits our economy to work and the Soviet Union's experience of not working. How that fits with each of the individual members' understanding of the role of profits I would sooner not comment on.

The Chair: Okay, I'd like to thank you for appearing before this committee. I think you've added a little bit of extra information that we didn't have before. Thank you.

Mr Eastman: Thank you.


The Chair: The next group we've got coming forward is the Associated Canadian Car Rental Operators. Do you have any associates with you? Okay, fine. Would you mind identifying yourself for the purposes of Hansard and the people of Ontario.

Mr Sid Kenmir: My name is Sid Kenmir. I am the executive director of the Associated Canadian Car Rental Operators. Thank you for the opportunity to appear before the committee.

The Associated Canadian Car Rental Operators is the major industry association for car and truck rental operators. I speak on behalf of 65 daily rental companies in Ontario. Our members include both the largest and the smallest car and truck rental companies in Ontario.

The car and truck rental industry in Ontario currently employs about 7,000 people. It is one of the major purchasers of automobiles and trucks, buying and insuring approximately 50,000 vehicles annually. Our customers are tourists, travelling business people, Ontario residents who require replacement cars after accidents and/or while their cars are being repaired, and those who do not own cars but require one on an occasional basis for weekends and holidays.

Our industry supported Bill 68, known as the Ontario motorist protection plan, OMPP, during its legislative passage. We continue to support OMPP for several reasons, not the least of which is the new stability in automobile insurance premiums. As you recall, prior to its introduction, rates had been rising in response to dramatic increases in claims costs. OMPP was designed to control rising costs in order to cap rising premiums, while at the same time provide a fair level of benefits to those unfortunate individuals who were injured in accidents.

Our experience over the last 30 months suggests that OMPP represents a fair and reasonable tradeoff between premiums and benefit levels. And why not, after the extensive work which preceded its design? In addition to stabilizing premiums, we have observed the insurance industry develop a new service-oriented attitude in place of its adversarial attitude prior to OMPP. We have seen our claims handled in a much quicker and more efficient manner. Many of our firms have received premium reductions under OMPP; in turn, these savings have been passed on to our customers.

We are here today because the car and truck rental industry in Ontario believes that Bill 164 is a solution in search of a problem.

Our industry opposes Bill 164. We ask that the bill be withdrawn so that there can be opportunity for further review and consideration. I would like to take the next few minutes to make what I hope you will perceive to be a compelling case against this ill-conceived piece of legislation.

Let me say first that I recognize the challenges that this government faces. The challenges are many and they include unemployment, increasing taxes, rising provincial debt, technological change, global competition and enormous pressures on our social welfare and health care systems. Against this backdrop, I must state that surely this government must focus on what matters, which the Premier has said is the economy. I fail to see how the passage of Bill 164 will help the Premier, whom I have enormous respect for, achieve his goal of economic recovery for this province.

Voters understand that this is the first time the NDP has had the opportunity to govern and that it is through sheer misfortune that this opportunity presented itself at a time when Ontario faces so many formidable challenges. Voters will measure the performance of the government by its ability to help Ontario achieve economic recovery. Therefore, this government must focus on legislation and policy which will help Ontario achieve economic recovery and not be sidetracked by legislation designed to appease caucus members who believe that something must be done on auto insurance, whatever that something may be.


Not only will Bill 164 not encourage economic recovery, it will actually discourage economic recovery. It will do this because claims costs will rise significantly, which means premium increases. Our industry calculates that insurance costs will increase well in excess of the $200 per year cited by the industry, for two reasons. First, we believe significantly more than 18% of claimants will be able to sue for non-economic loss after application of the proposed deductible. Second, we believe the $15,000 will have an inflationary impact on awards, driving awards higher than they should be.

I would like to elaborate on how Bill 164 will discourage economic recovery. Increased premiums will mean that car and truck rentals will increase in price. This reflects the fact that car insurance is the biggest operating expense after the purchase of vehicles on our income statements. Since demand for car rentals is somewhat elastic, the price increase means there will be less demand and it is likely that some of our smaller operators will be put out of business. One of the reasons our industry was able to return prices to 1980s levels was the introduction of stable insurance premiums brought about by the Ontario motorist protection plan.

Not only will car rentals not be as affordable for Ontario consumers, they will also be less affordable for tourists who visit Ontario and rent cars. At a time when it is already acknowledged by tourism industry officials that Ontario is an expensive destination for American tourists, it does not make sense that public policy will add even more costs on the backs of tourists who vote, if you like, with their feet by not coming back to Ontario.

We applaud the government's decision to appoint a task force on rehabilitation and long-term care benefits for people injured in automobile accidents. This represents a first step towards what the industry hopes will be a decision to introduce enhancements to the current system in order to arrive at an even better balance between affordability, fairness and benefits.

We also hope that if the government has the political courage to embark on this route, it will return to the House with a bill that addresses the root of the problem: accident frequency and severity. Like others who have appeared before this committee, the car and truck rental industry is extremely disappointed by the bill's lack of road safety measures.

Although I am not a public policy expert, it baffles me that this government wants to proceed with comprehensive reform of the system without these measures. Surely Ontario can play a leadership role in the field of road safety by putting together a group of experts in this area to develop measures and incorporate them into a bill that will truly represent positive change of the auto insurance system.

In conclusion, the car and truck rental industry acknowledges that no system, including OMPP, is perfect. The current system can be improved with changes on a smaller scale than those proposed in Bill 164, changes that make better sense for our industry and for drivers and will keep insurance at an affordable price. Like others who have appeared before this committee, we ask that the government withdraw the bill and allow time for further review.

I appreciate the opportunity to appear before this committee and thank you for your consideration.

Mr Ward: Thank you for coming out this afternoon to give your fine presentation on behalf of the Associated Canadian Car Rental Operators.

I notice you have some concerns about Bill 164. I think you understand that as a government, after our election, we had serious concerns with the existing auto insurance plan. We felt it was inadequate for a number of reasons and it needed change. When we made the decision not to proceed with public auto insurance, we developed Bill 164, which we have before us today. With Bill 164, we tried to strike a balance between expanded and enhanced benefits for many innocent motor vehicle accident victims while still being concerned about the cost to the driving public through premiums.

If you can try to divest yourself of the cost aspect -- and I know you can't; you have to realize that every benefit you increase is a cost to it -- just say you could for a moment and just look at the benefits we've improved through Bill 164. Setting the cost aside, could you support those benefits that we've increased?

Mr Kenmir: No, a lot of those benefits I can't support. The $15,000 deductible from $600 to $1,000 a week, I just can't support all that stuff.

Mr Ward: Setting the cost aside, you couldn't support and your members couldn't support increasing the benefit from $600 to $1,000?

Mr Kenmir: I don't think so.

Mr Ward: Why not?

Mr Kenmir: They have said at meetings -- I'm not an insurance expert myself, I'm a car rental person -- that they don't want changes, and I'm here on behalf of them rather than drag 65 people in here today.

Mr Ward: You don't support any of those benefits?

Mr Kenmir: No.

Mr Ward: Not one, your organization, the Associated Canadian Car Rental Operators?

Mr Kenmir: The Ontario car and truck rental operators would like to leave everything just the way it is right now.

Mr Ward: So I understand. We set aside the cost aspect.

Mr Phillips: That, and you weren't in the real world.

Mr Ward: If we set aside the cost aspect.

Mr Harnick: Sort of like the government does every day.

Mr Ward: Mr Chair, we've got some interjections from the opposition across the way there.

The Chair: Address the Chair.

Mr Harnick: Do what the government does every day.

Mrs Caplan: Mr Ward knows you can't set aside the cost.

Mr Ward: Mr Chair, I believe it's my turn to question the witness.

The Chair: It is. I don't hear anybody on the other side.

Mr Ward: Why would the Associated Canadian Car Rental Operators want to leave the exemption for, say, head injury people? Why would they want to leave that out of the OMPP?

Mr Harnick: What exemption for a head injury? There's no exemption for a head injury person.

Mr Ward: Why would they not want to enhance the benefits to include them?

Mr Kenmir: I think that --

Mrs Caplan: They're worse off under your legislation.

Mr Harnick: They can't claim for their economic loss.

The Chair: I'm sorry. Mr Harnick, I don't think you want anybody --

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

The Chair: What's your problem, Mr Harnick, or your point of order?

Mr Harnick: The question dealt with an exemption for head injury people under the Ontario motorist protection plan, I've got to tell you, Mr Chairman, there is no exemption for head injury people. There is a deletion or an elimination of those claiming for psychiatric loss under OMPP, which is a glaring mistake within the Ontario motorist protection plan, but when the witness is asked a question --

The Chair: I don't believe it's a point of order. I can't answer that and I think when it comes to your turn, you can use your nickel at that point to ask those questions or clarification.

Mr Harnick: I don't have a nickel.

The Chair: Well, your five minutes. Mr Ward, carry on, please.

Mr Ward: Thank you, Mr Chair. Why would the Associated Canadian Car Rental Operators be opposed to indexing some of the benefits?

Mr Kenmir: Most of the car rental companies deal very closely with their insurance carriers. Our premiums are always based on dollars in, dollars out.

Mr Ward: We set aside the cost, though.

Mr Kenmir: If Bill 164 makes one change, if we take that $600 a week up to $650, our premiums would go up a certain amount, and we don't want that.

Mr Ward: If I may, do I have --

The Chair: You've got time for another question.

Mr Ward: One more question.

The Chair: Yes, you've got two minutes left.

Mr Ward: What I was trying to get at, through the interjections of the opposition -- which I don't do to them when they ask their questions, Mr Chair -- is that we think that these enhanced benefits can be brought into operation through Bill 164 without undue pressure on increasing the premiums.

Mr Kenmir: We don't agree with that.

Mr Ward: If we can accomplish that, would you still be opposed to increasing the benefits and enhancing the benefit package for innocent accident victims in the province of Ontario?

Mr Kenmir: If this bill went through with no premium increase, the insurance companies would go right out of business and move out of the province and you could have what you wanted to start in the first place. That's all you could have. It just can't be done.


Mr Ward: You don't think so?

Mr Kenmir: No.

Mr Phillips: I think we have our solution now, thanks to Mr Ward and others, and that is that the premise of this bill put forward by the government is that it will not increase premiums. If it were to increase premiums, I'm gathering now the government would withdraw the bill, because the whole assumption from the government is that premiums will not increase. I think now all we need to do is determine that, and if we can prove the premiums won't go up, then many of the concerns about the bill will disappear. But if the premiums are going to go up anywhere near what we've now heard from many, many witnesses, I gather the government will withdraw the bill.

I think what we need to focus on now is whether premiums will go up or not, because all the government members have said to us now the reason they're supporting the bill is because the premiums won't go up and the benefits will change as proposed. So we have the focus now, Mr Chairman, and I think over the next little while that's where we need to focus. At the end of the exercise, after we've gone through the Mercer report in more detail and after we've examined that, that's what we need to find.

I would hope the government, once those numbers are finally agreed upon, if it is shown that there will be a premium increase, would now agree to withdraw the bill. Perhaps we can have some comment from the parliamentary assistant on that.

Mr Owens: Your question is based on some false supposition that you've created in your own mind in terms of the other government. We have not stated that we would withdraw the bill if --

Mr Phillips: Mr Ward said you're proceeding with the bill because premiums won't go up. I assume that you wouldn't proceed if the premiums were going to go up.

Mr Owens: The ultimate decision with respect to premiums, as you're well aware, is up to the Ontario Insurance Commission.

Mr Harnick: Oh, they're going to be the bad guys. Now we're starting to understand.

Mr Phillips: I appreciate the comments. I think we now have the basis on this bill for determining whether it will be withdrawn or not, because I think now if one were to look at the series of presentations we've had, an overwhelming number of them say, "Withdraw the bill, and if there are some minor improvements that need to be made, make them." That's your presentation. As I say, we've now narrowed the focus, and I appreciate your presentation because I think it's elicited from the government members the basis on which they would agree to withdraw the bill.

If it turns out that we are looking at $200 increases in the premiums, I assume the government would agree to withdraw the bill. So we need to focus, as I say, on that issue, because what I think the car people have indicated quite clearly to us is that, from their perspective, people are hurting out there. A $200 premium increase to your members would be extremely devastating, and actually your advice is you think the premiums may go up more than $200. So we've now narrowed it, Mr Chairman, and I appreciate the witness's presentation.

Have we any more time?

The Chair: Yes, you have.

Mr Phillips: In terms of the car rental business, how important are insurance premiums to your industry? I appreciate that you're saying you play a role in tourism, and I believe that. How important are insurance premiums to your industry?

Mr Kenmir: Insurance premiums would be 15% to 20% of our income; 15% to 20% would go out on insurance premiums. Car rentals are a little bit riskier than your own personal car. When I rent a car to someone, they're going to be in a strange car, they've never even driven that kind of a car before, they don't know anything about ABS brakes and they're liable to have an accident. Our rates would possibly increase $300 to $400 a year, we estimate.

Mr Phillips: That's helpful, sir.

Mrs Caplan: I'd like to pursue the line of questioning of my colleague, because I believe that's what the essence of this legislation is about and that's what my constituents are concerned about. They don't want premiums to increase. You've told us in a very clear way that if you increase the benefits, as this bill purports to do, if you make the kinds of changes that create the uncertainty that we know this bill is going to do, premiums will increase, that that's just common sense. Is that your --

Mr Kenmir: Oh, sure.

Mrs Caplan: Further, the stability and the certainty created for your industry by the plan in place now, called OMPP, allowed you to lower your rates in the car rental business, and this piece of legislation, Bill 164, as it is presented now, because of the uncertainty within the bill and because of the costs and premium increases, will force you to raise your rates and that will have a detrimental effect on the economy of Ontario. Is that what you're telling this committee?

Mr Kenmir: Definitely. This bill would bring us back somewhat towards the tort system.

Mrs Caplan: So you don't think this bill is in the interests of Ontarians individually, or business in Ontario?

Mr Kenmir: I don't think it is. I've even listened to radio stations where they've had polls and they said 70% don't want it.

The Chair: Okay, fine. We've got to go to Mr Harnick. Maybe he can straighten the record out now.

Mr Harnick: I don't think anybody can straighten a record out, Mr Chairman. I've been sitting here for three days now. I haven't heard anybody come in and say anything about this bill that's, in anybody's estimate, positive.

Mr Owens: How long have you actually been here?

Mr Harnick: I'm just wondering, now that we've been doing this for three days at the taxpayers' expense, bringing all these people in here. We haven't heard a single person say anything positive about this bill.

Mr Owens: That's not true.

Mr Harnick: I've just been reviewing the list and I haven't heard anybody saying anything good about this. I suspect the comment you make about polls and people saying good things about it strikes you as being kind of funny, that nobody seems to be supporting this bill except the government. Even most of the members of the NDP don't support this bill, just the members of the government who happened to remarkably get elected on September 6, 1990.

One of the things I want to talk to you about -- and you've touched on it in your brief -- is very interesting. There's nothing in this bill about road safety. We heard from Mr John Bates, the person who looks after PRIDE, People to Reduce Impaired Driving Everywhere, and MADD, Mothers Against Drunk Driving.

He made a presentation yesterday and told us that if the government would start listening to the things he's been asking them to do for the last couple of years, such as graduated licences and a number of other things -- changing the drinking age and things of that nature -- he thought serious accidents could be reduced by about 10%. You know that serious accidents are the bulk of the moneys put out by insurance companies to pay people for their damages, so if they could institute some kind of plan to reduce serious accidents, we could probably amend the existing bill so that everybody would be happy. Would you agree with that?

Mr Kenmir: I would agree.

Mr Harnick: Isn't it astounding that the government hasn't done anything in that regard? As a member of the public, don't you think that's a rather strange thing?

Mr Kenmir: That should be one of the priorities, really.

Mr Harnick: All right; thank you.

The Chair: Okay, fine. There are just a few comments. You know the Chair doesn't say too much too often, but there are some people down in the area of Lincoln who I represent: Arn Fee from Thrifty. I don't know if you know him or not.

Mr Kenmir: What's his name?

The Chair: Arn Fee, Thrifty rent-a-car and Peter Lumsden from Tilden.

Mr Kenmir: I know Peter, yes.

Mrs Caplan: Is this a commercial?

The Chair: No, it's not. I'm just wondering, because they're friends of mine and I know them quite well. I know one thing they were upset with was the tire tax that came in with the rental industry, but the other thing is, does the industry make any money selling insurance to renters?

Mr Kenmir: It very seldom gets done any more and it's not an insurance. It's called a loss-damage waiver. It doesn't get sold any more. Everybody's got credit cards or the insurance from their own car transferred to the rental car.

The Chair: But for a person walking off the street who didn't own a car and was going to rent one, that's part of the insurance you have to purchase.

Mr Kenmir: If he has a Gold American Express card, Gold Visa or Gold Mastercard, they cover the insurance, so very little of that is sold any more.

The Chair: Okay, fine. It was a few years ago.

Mr Kenmir: A few years ago it was really good.

The Chair: I'd like to thank you for appearing before this committee today. I think you were very informative to quite a few of the members here.

Mrs Caplan: Very helpful; thank you.

Mr Kenmir: Thank you for having me.



The Chair: We now have the Toronto Taxi Cab Owners and Operators Association. Would you come forward, please. I'd like to welcome you to the standing committee on finance and economics. We have half an hour, till 5 o'clock. We'll be recessing until 7. You have half an hour's time to make your presentation. If you can, leave some time within that half an hour for questions after your brief. As you can see, the members are anxious to ask questions of you.

Mr Sikko Wiersma: Yes, I can see that.

The Chair: If you wouldn't mind, identify yourselves for the purposes of Hansard and the people of Ontario.

Mr Wiersma: My name is Mr Sikko Wiersma. I'm one of the directors of the Toronto Taxi Cab Owners and Operators Association. With me today is Mr Lawrence Eisenberg. He is the president of the same association. We've been in existence slightly over three years and we've attempting to be proactive in the various areas of our industry to serve the public better.

I've handed out some material. It's in point form. I've discovered in the past that when you hand out a lot of literature it tends to put people to sleep. Members in our industry falling sleep is not a good idea, because they're generally handling 3,000 to 4,000 pounds of steel and plastic on the road.

Mr Phillips: And your premiums go up.

Mr Wiersma: Well, they did go up at one time. Just to follow through on what the previous gentleman said with respect to the rental industry, the taxicab industry has a parallel problem. I was speaking to one of the MPPs here a couple of days ago, Mr Chris Stockwell, who is, I believe, in the car rental business. He confirmed to me that OMPP reduced his premiums in the last few years.


Mr Wiersma: Please, folks, can you cut the chatter? I find that very insulting and disturbing. I'm not a professional lobbyist. We're simple people in a very difficult business in a difficult time. I would appreciate some courtesy from our members of Parliament. Thank you.

The Chair: I have some problems as a Chair at times too. Ignore them. You're talking to me. I'm listening.

Mr Wiersma: I'm not an elected member, Mr Chair. We're simple businessmen. The economy has turned us from businessmen into beggars and we're here begging against this bill.

I must say, to follow through on what Mr Swart, a very highly respected member at one time of this particular government, said yesterday, that whoever designed this bill must have been smoking some old taxi claims and shredded taxi receipts, because this is an absolute piece of trash. We also have very little respect for the insurance industry, but let's get back to the government's mandate. You people in the government can snicker, but the population out there took you very seriously.

Mr Dadamo: We'd appreciate it if you got to the point.

Mr Wiersma: I am.

The Chair: Mr Dadamo, the gentleman has half an hour. You will have your time when it comes.

Mr Dadamo: I believe he's out of line.

The Chair: No, he is not out of line.

Mr Dadamo: Yes, you've asked him to direct his comments to you. He's not doing so. Now, we'd like you to reinforce that.

The Chair: I didn't hear that; I was signing a piece of paper.

Mr Dadamo: We'd like you to reinforce and open your ears and listen.

Mr Phillips: The gentleman is expressing the view of his association. You may not like what you're hearing, and we may not like some of the things he says either, but he has the complete right to express the views of his organization. Mr Chairman, I think you have to bring them to order.

Mr Wiersma: We represent an industry which employs approximately 14,000 people in Metro Toronto. There are also 15 members of this government -- we're sorry about the passing of one of the members last Friday -- left within Metro and I would think that we should have the courtesy of a hearing. I would appreciate it.

Let me get back to my personal experience. When I went to Carleton University as a student, two of my professors belonged to your particular political party. One of them was Douglas Fisher and the other one was the late Pauline Jewett. I must say that when I studied political science and economics, I had the highest regard for these people. Even though philosophically I may not have agreed with them, I learned a lot from them. The tradition that was established by the CCF party, with Mr Woodsworth, Mr M. J. Coldwell, whom I met personally, a fine gentleman, and Mr Tommy Douglas, somewhere has been lost -- what I referred to earlier -- in your election mandate or your promise for public auto insurance.

Getting to Bill 164, Mr Kormos was quoted in a newspaper the other day as saying that the government is dancing in a fog. Our position within the taxicab industry is that the government is dancing in the financial red light district, that this bill, financially, is going nowhere. With the condition of our economy, even people who are unemployed still have vehicles that they require in many areas to go and hunt for jobs. If you increase their premiums, whether it's $20 or $200, what you're doing is you're taking away from disposable income that they don't even have, and this is a regressive measure.

The first priority of this bill should be to go back to your Bill 39, the Ontario Road Safety Corporation Act. The legacy of the automobile on this continent, the maiming and injuries and deaths that it has caused since the turn of the century, is approximately one million people who have lost their lives. In this country last year we lost the equivalent of a 747 planeload of passengers going down weekly.

That's the terrible legacy the automobile is leaving in this country. We have our share of accidents in this province. We feel that the emphasis should be on upgrading road safety and taking preventive measures to prevent accidents. This bill will not prevent one automobile accident and it will not save one life.

The insurance industry has record profits for the year 1992. You people have all the data and the figures. Not one dollar of those profits is being plowed back into road safety or public safety. What we advocate is that there should be a forced proportion of premium funds and profits plowed back into accident prevention.

Going on to the public safety factor, at one time there were governments in this province that took hard decisions with respect to public safety. For example, years ago the government of Premier Robarts reduced the speed limit on the 401 from 70 to 60 miles per hour. They also introduced the seatbelt legislation, and I was amazed at that time how that reduced fatalities and injuries on the roads; the statistical drop was phenomenal. I don't have all that data with me, because that tends to put people to sleep. But the principles were there.

The Ontario motorist protection plan, or this no-fault system, has some faults and it has some flaws, but it has reduced the insurance premiums, as I mentioned earlier, for the car rental industry, and it's also reduced the premiums for the taxicab industry. It's one of the few cost factors that we've been able to reduce in an industry that is financially hard-pressed.

We have 11,500 taxicab divers in this city, approximately 4,500 full-time and the balance are part-time; 80% of those drivers are recent immigrants. When you impact on a category like insurance, which is our major cost factor next to the purchase of the automobile, then you're going to impact on the rates that the drivers are going to be paying, which will further shrink their disposable income. I spoke earlier about this type of proposal being regressive. What you're doing is you're hurting the people who can afford it the least. If you really boil it down, it's a discriminatory proposal for our industry.


When I became involved in the taxicab industry in Toronto in 1982, with respect to the insurance industry's treatment of the taxicab industry, we started off as a second-class citizen. I can assure you that this degenerated over a period of five or six years to about a fifth-class citizen. Our industry had insurance cancellations by carriers that were abominable. You have no idea what a horrendous experience it is to have $250,000 worth of rolling stock like I had and to be dancing with the devil, to have insurance being carried by three different brokers and insurance carriers because if there was a fatality or a loss with the one carrier, at least my whole business wouldn't go down the dumper. However, for one reason or another, the carriers eliminated us.

What I enclosed was some backup material under the old system, and what we particularly want to challenge in this bill, from a financial point of view, is this $15,000 deductible. I heard somebody whistling past the graveyard here yesterday, saying that should be reduced to $7,500.

I've enclosed two claims which involve non-accidents. When I'm speaking of non-accidents, they're both claim payouts. I've included some of the adjusting material and notated one as exhibit 1 and the second one as exhibit 2, where I paid out money in order not to have a loss on my premiums registered with my insurance company. I paid it out personally. This was under the old system, where the slightest scratch or the fear of an incident, as you can see by the material, if you have the time or take the time to read it, would cause a payout. The payouts were approximately $4,000 each.

I have higher payouts pending, but I can't comment on both of those issues because they're both before the courts and they're in the higher courts. So I can't discuss those particular incidents, but they also deal in an area that I would consider fraud.

Basically, in the old insurance system that we had, everybody was part of the fraud. There's no reflection on the current adjuster in these particular settlements -- he did a fine job on my behalf -- but whenever there was a collision, the tow-truck operators were on the take, the body shops were on the take, the adjusters and the appraisers, everybody took a piece of the action, and for virtually no damage, we were paying out thousands and thousands of dollars. In total in this province we were paying out millions, and for the insurance companies to pursue this kind of thing, the easy way out was to sock up the premiums. "Don't worry about these things, because you can always sock it back to the premium holders."

Ultimately, one of the best things the Liberal government did was introduce the Ontario motorist protection plan. It has faults, as you can see by exhibit 3. When I went through my old insurance claim files the night before last, a nice stack that high, I just wanted to put it in there for comic relief. I lost a car, the same car I paid out for under exhibit 1, $4,300 for no damage. It was sandwiched in a rear-ender and the car was a write-off. These things happen, but we were prepared to take those risks.

It had no impact on our insurance rates, and an industry, what I've shown on page 2 is an average. We have about 20 categories of ratings. What we've done is extrapolated the data and averaged it out for leased vehicles, that operate under leases, and separated out the owner-operated vehicles, because those are the two main categories. There was a tremendous difference in insurance rates for those. Without going into the reasons why, you can see that the taxi cab industry was subsidizing other categories in the automotive area.

In 1992, under OMPP, our premiums have been reduced. The profit doesn't look as high, but that's because a lot of the reserves the insurance companies set aside are still outstanding from the old system.

Now, this plan: I would like to address the government on this. I have a feeling of déjà vu in this committee room. You people went through a horrendous process, and Mr Owens knows this, on the MVA debate at the end of November, and you people took a decision; not just a political decision, but you took a decision that this was bad legislation. You bit the bullet and you went through it and I don't think you'll lose any political points. You won't lose one vote in the suburbs for people who are overtaxed, believe me, because their taxes should be lowered.

Let's get back to insurance. You won't lose one political point. Look, I'm not a politician and I don't have to be elected, but it stands to reason that if I'm at a point in the polls where I'm going to be out of a job in two years -- the people who are lawyers will certainly benefit from this, because the rest of you will have to find other employment, like the rest of us struggling in the economy. But this bill will just reactivate the claims system, and $15,000, as I've shown you by my two examples under the old system of paying out approximately $4,000 for no accidents -- there's no damage. Basically, it's fraud, and I'll call it fraud. If somebody would like to challenge me on that and sue me, welcome. We'd be willing to take up that challenge at any time.

What you're going to introduce is another system; it's just that the level's going to start a little higher. But for lawyers and doctors and psychiatrists and whoever else, to start at $15,000 is nothing. A judge is going to sit up on the bench and he's going to look at someone with a $20,000 lawsuit struggling up, and he's going to raise whatever the claim is to cover the legal cost, to cover the medical cost and say, "You're going to have a little bit left over," and he'll just sock the $15,000 on top, and there we are again. We'll be back to the same problem. We'll just be dealing with it at a higher level and everyone will pay.

How much time have I used, Mr Chairman?

The Chair: You've used up 15 minutes.

Mr Wiersma: Fifteen minutes? All right.

The Chair: And unprofessional and with no notes, you're doing real good.

Mr Wiersma: Look, we feel very strongly about this.

The Chair: Mr Wiersma, we hear from the heart, and one thing you have to understand, we're here to listen. This bill hasn't passed.

Mr Wiersma: I understand that.

The Chair: It's not too late. So what you're saying, the government and this committee are listening to.

Mr Wiersma: Are they? I hope so, because I must say --

The Chair: I know you sounded frustrated at the very beginning.

Mr Wiersma: I did because of the crosstalk.

The Chair: But the Chair is listening and most of the committee members are listening.

Mr Wiersma: Okay. We have a horrendous problem economically. I made that point in my notes on page 2: "Our gross revenue decline is 40% on the street." That's on the street. That's for our drivers. Our insurance premiums have only dropped about 20% or 25%, and that's only one cost factor. But to offset that, from 1989 to 1992, the category of licensing-to-our-industry costs has increased from $2.8 million to $4.8 million. We have a licensing commission, condoned by Metro council, the same people who were going to do it to us with MVA, who are doing it to the cab industry. They're going to expand the commission and triple the size. It just passed through management committee two days ago.

I'll just summarize what I want to say. It does come under the Ministry of Municipal Affairs, and someone in this government should have a very serious look at the problems that this industry is suffering at the Metropolitan Toronto Licensing Commission. It smells. The cost factors that we're faced with there are astronomical, and what's going on is a disgrace to this community.

Getting back to insurance, our industry recommends that we allow the OMPP to run another two years. If the government believes there will be no premium increases, put out a separate insurance package -- put it out in the marketplace or have a government-run package -- and put those benefits out separately. If you believe there's no premium increase, the insurance industry will pick that up separately, and it'll run with it. But I would doubt if you'll get one taker.

Let's get to the benefit changes and the deductible proposal. Whether it's in the public or private sector, it doesn't make much difference, I think. It appears to be an exercise in political futility. It's a financial disaster that's going to come, and everyone in this province who drives a vehicle is going to pay. What we recommend is that you scrap this Bill 164 and embark on a program of accident prevention. Let's prevent the accidents from happening. Let's get on to a program of road safety. You people have all the data; you don't have to re-examine your navels to do this. The material is there. The Ministry of Transportation has the material. With all this staff that our tax money is paying, why don't you people use them? Make these bureaucrats accountable to you. We're paying the shot as taxpayers, but you people are responsible, as legislators, to do this in the interest of the community.


As the last thing, I don't think we can emphasize strongly enough that within Metro -- I know it doesn't apply across the province -- public and mass transportation has the best safety record. They don't have the accidents if we can get people out of the cars, on to mass transit and on to mass transportation -- trains, buses, trolleys, whatever we can use, GO trains -- get them out of the automobiles. The safety record of our GO system is phenomenal compared to Amtrak in the US. I think these people should be commended. That's the type of program this government should be busy with, instead of trying to reinvent the wheel. There has been six studies done in the last six years on insurance. How many times do you want to reinvent the same wheel?

That's all I have to say. Do you have any comments, Mr Eisenberg?

Mr Lawrence Eisenberg: Yes. Basically, what we're talking about is we delivered 30 copies of the bill and regulations to owners and drivers. We asked them to instruct us about what to do. Without fail, they returned the documents to us, each of them saying two different things: "What is this?" and, "We can't understand it." If a working-class person can't understand the legislation enough to tell us what he feels, how can you implement it? That's the bottom line.

The Chair: Mr Mancini, three minutes.

Mr Mancini: When the subcommittee decided to put the Toronto Taxi Cab Owners and Operators Association on the list of witnesses to be heard, we thought at that time that we would be hearing from an interesting group of people and hearing an interesting view on automobile insurance. You've more than lived up to our expectations. I think we've heard from you things that we have not heard from other witnesses, important things. For example, I don't think many of us knew -- we maybe assumed -- that rates were in fact out of control for you pre-OMPP. We knew that the OMPP had dropped your rates, but not as dramatically as you have shown us today.

The other thing I would like to comment on is the fact that you're willing to work with the government and allow changes to be made, but only after a necessary time period has elapsed and appropriate study has been done. Your suggestion that we allow the OMPP to work for a couple of years to see what other wrinkles might be in the bill that need to be ironed out or fixed up is, in my view, a very positive suggestion.

You've dramatically shown us in your statistics that people in the taxicab business have taken a big hit as far as income is concerned. One point I'd like to make is that this morning we had the Ontario Federation of Labour before us. I was mentioning to the gentlemen and to the committee that if we took only the government's opinion and studies and advice from their consultants, rates were going to go up a minimum of 4.5%. Other people said as high as 20%. I believe the answer was something like: "That's all abstract. We don't know if that's going to happen."

Mr Wiersma: It's not abstract to us.

Mr Mancini: That was going to be my question. You've studied the bill, you've looked at it. Do you think that Mercer's comment and conclusion that rates would go up 4.5% is abstract? Coopers and Lybrand's conclusion was that it might be, I think, 20%. I believe Wyatt was 13%. We go from a range of 4.5% all the way up to 20%. Do you think that's abstract and some kind of fairy tale?

Mr Wiersma: It's a fairy tale and voodoo financing because you cannot anticipate the litigation and the lawsuits that are going to result from this bill. The insurance companies, as soon as there's a frequency, they put a loss reserve aside. In my data you can see there are not necessarily losses. That money is in reserve, although as soon as you put a loss reserve aside, the insurance company hits the premium holders and they hit everyone, but they'll hit a specific category harder than others. I know that part of the proposal in the bill is to eliminate discrimination, but the taxicab industry has been discriminated against in premiums previously. The treatment of us by the insurance industry has been appalling. It's a separate issue.

Mr Mancini: So your conclusion is that rates are going to go up?

Mr Wiersma: Definitely, yes.

The Chair: Mr Mancini, I'm going to have to go on to Mr Harnick.

Mr Harnick: Sir, have you been a cab driver yourself?

Mr Wiersma: Yes, I've been on the street myself.

Mr Harnick: For many years, I'll bet.

Mr Wiersma: Approximately 10 years.

Mr Harnick: I note your comments that you like the OMPP, and I suspect that one of the reasons you like that is because it gets rid of a lot of what you perceive to be the small claims.

Mr Wiersma: The nuisance claims have been eliminated, and what I put in my exhibits, the fraudulent stuff, what we considered the old fraud, the money-wasters.

Mr Harnick: Just so I understand you, you don't believe there's anything wrong with an innocent person who's seriously injured having the right to make a claim. Is that correct?

Mr Wiersma: Of course.

Mr Harnick: That's trite, isn't it?

Mr Wiersma: It's not trite. A person who is seriously injured deserves to be recompensed for whatever his losses are, whether it's pain, suffering, physical disability, rehabilitation, loss of income, if it takes 20 years or 50 years or whatever. Definitely.

Mr Harnick: That's something that's obvious to one another as human beings, isn't it?

Mr Wiersma: Definitely.

Mr Harnick: I just don't know what your circumstances have been in terms of your driving a cab, but I gather you've seen the odd personal injury accident first hand.

Mr Wiersma: Quite frequently.

Mr Harnick: You may have even been involved in some of those yourself.

Mr Wiersma: No.

Mr Harnick: You've never been involved in a personal injury accident yourself?

Mr Wiersma: No, sir.

Mr Harnick: Or been injured yourself.

Mr Wiersma: No.

Mr Harnick: But you've seen what happens to people in car accidents.

Mr Wiersma: Yes. I have accident files for my taxicabs at home this deep.

Mr Harnick: And the ones where people suffer serious injuries are pretty significant claims, aren't they?

Mr Wiersma: Generally, yes.

Mr Harnick: People go through a lot of agony when it happens.

Mr Wiersma: Certainly.

Mr Harnick: You've seen cab drivers -- because I know, I've acted for a number of cab drivers who have been seriously injured in accidents -- who can't work. Correct?

Mr Wiersma: Certainly, yes.

Mr Harnick: You would agree with me that in terms of a good insurance bill, someone should be able to claim for his actual economic loss that his no-fault benefits don't pay.

Mr Wiersma: Unquestionably.

Mr Harnick: Sure. So you don't have a problem with that and it's the nuisance claims, the small, little claims that we're happy to get rid of, out of the system.

Mr Wiersma: That's right.

Mr Harnick: And that's in fact what the deputy minister said yesterday, that the purpose of the $15,000 deductible was to get rid of the small claims. Correct?

The Chair: Mr Harnick, I've got to go on to Mr Winninger.

Mr Harnick: All right, thanks.

Mr Winninger: I certainly travel public transit whenever I go back and forth to my riding, and I ride in a lot of cabs. I'm aware of the challenges that cab drivers face right now.

To come back to OMPP for a moment, I stopped practising law in September 1990 and I still get calls from old clients, constituents and other people complaining about the fact that they fell through the cracks of OMPP. There's a lot of bitterness out there surrounding it. I think there is, to come back to an earlier point, a constituency out there that would like to see improvements in the OMPP.

I'm aware of recent case law which has opened up the right to some extent to sue for serious and permanent injury, which would probably have some upward pressure on existing rates under the OMPP. I'll tell you quite frankly -- and I'm approaching a fairly fundamental question here -- in August 1991, 800 insurance agents, brokers and employees demonstrated outside my office in London and said they didn't want us to take over auto insurance and make it public because they could achieve better premiums, they could achieve better benefits and a better rating system if it were left to regulation by the ministry. Now we've made some modest changes to improve the benefits and to control premiums and to improve, hopefully, the rating system, and the insurance companies --

Mr Wiersma: Is there a question?

Mr Winninger: Yes. The insurance companies are saying that the rates will go up. Your concern seems to be with the cost of claims. I would ask you, what provision do you have for independent or employed taxi drivers that would ensure, whether they're at fault or not, that they'll be adequately provided for if they have the misfortune of a collision that causes fairly serious bodily injury?

Mr Wiersma: The OMPP has made provisions for the loss of income. I think that the $600 cap more than adequately covers the money that the cab drivers are making now. I don't want to go into those types of data at the present time, but let's backtrack to the old system and this carnage on the roads that I described before, when you would drive along and you would see the back of a bumper that said: "Go ahead, hit me. I need the money." That's a pretty disgusting thing to have on automobiles. As a matter of fact, you people should legislate that kind of levity off the roads, because there have been too many fatalities and there are too many paraplegics in our trauma centres. That kind of attitude is disgusting.

As far as the insurance brokers and the insurance people demonstrating, when I studied the economics of insurance at university, the first statement my professor made was, "Insurance, the definition: a lot of people pooling small amounts of money to offset a large loss." The insurance industry basically is a parasite industry. As far as I'm concerned, they're non-productive. They certainly don't measure up to lawyers.

Mrs Caplan: We know where the lawyers are.

Mr Winninger: I speak kindly of cab drivers.

Mr Harnick: You're not going to start picking on politicians, are you?

Mr Wiersma: Of course not. Look, we only do that at the time we mark the X, and that's basically why we're here today. Our drivers speak to, say, 20 passengers per day on a 10- to 20-minute, one-on-one basis, and politically they're generally fairly knowledgeable. Although they may be complacent at times, they do speak, in Metro, to about two million impressions a year. Some of them are tourists but we have no tourists left, so they're all the local people now. If you do something detrimental to the cab driver, believe me, I think it may have an adverse effect in the polls.

Getting back to the insurance brokers and the agents, I don't think that British Columbia fell apart under a public insurance system and I must commend -- I'm not philosophically a socialist, but when I spoke to Councillor Moscoe the other day I said, "Could you come and confirm how bad our industry's problems are in this city?" because he's very familiar with them. He said: "Sikko, frankly, I don't want to go. I don't know anything about insurance." I admire an honest politician, and this bill proves to me that you people also know nothing about insurance.

Mr Winninger: That wasn't the answer I was looking for.

The Chair: I see the little beep up there. I see the little beep on the corner of the TV telling me that it's 5 o'clock, and the crew up there are telling me that the time is over until 7 o'clock. I'd like to thank you for coming before this committee. If anybody has said you didn't give a professional brief there, they're wrong, okay? Thanks for coming.

We'll resume the hearings at 7 o'clock tonight. This committee is recessed until 7 sharp.

The committee recessed at 1704.


The committee resumed at 1859.

The Chair: Good evening. This is the standing committee on finance and economic affairs. We're on Bill 164, An Act to amend the Insurance Act and certain other Acts in respect of Automobile Insurance and other Insurance Matters. This is day 3, the evening session. We'll be here from 7 until 9:40 tonight.


The Chair: I'd like to welcome the first group, which is the United Senior Citizens of Ontario. You'll have half an hour. In that half an hour, try to save some time after your brief for questions from committee members here. They're usually anxious to ask questions. If you don't mind identifying yourself now for the purposes of Hansard and the people of Ontario, you may go ahead.

Mr Alex Mansfield: Mrs Jane Leitch is president of the United Senior Citizens of Ontario. Mr John Atto is our consultant from the auto association. I am Mr Alex Mansfield, past president of the United Senior Citizens of Ontario.

We wish to thank you for the opportunity to present our views to you on the proposed automobile insurance Bill 164. The United Senior Citizens of Ontario is an organization representing over 1,000 senior citizens clubs. The membership is estimated to be in excess of 300,000 retired persons. The mandate of the organization is to better the quality of life for senior citizens of Ontario. We have tried to be positive, constructive and realistic in the preparation of this brief.

Before getting into Bill 164 itself, we thought we should give the committee some background on the reaction of our members to the last changes in automobile insurance. Quite frankly, the reaction has been minimal. This supports our view that the current system offers significant benefits to seniors and should not be changed along the lines of the proposed legislation.

For example, we have received very few complaints about the present method of claims handling, either for bodily injury or property damage. Improved claims handling and efficient delivery of accident benefits appear to be direct results of the current legislation.

Another benefit to seniors has been premium stability. As you recall, premiums had been rising because of increasing claims prior to 1990. Obviously, our members have been pleased with the stability in the last two years. With this in mind, we certainly question the need for any change in automobile insurance. We suggest that, instead, this government undertake further review and replace this bill with a bill that offers a better balance between enhanced benefits and costs.

We will break down our comments into the following areas: indexing, retirement at 65, compensation for people close to 65, care givers, cost, the future and possible solutions.

Indexing: We note that Bill 164 allows for indexing of benefits for those who are employed at the time of an accident but not for those who are retired. We simply cannot understand how any government or bureaucracy can decide that inflation affects employed people but does not affect retired people.

Retirement at 65: Bill 164 seems to have unilaterally decided that the proper age for retirement from the workforce is 65. This is an issue that is presently the subject of much discussion, not only with the public in general but also our membership. While many arguments could be made pro and con on this subject, we do not feel this should be enshrined in Bill 164 or any other legislation until mandatory retirement has been dealt with on its own.

Compensation for people close to 65: Keeping in mind our objections to the arbitrary use of age 65, we would point out that there is an apparent contradiction in Bill 164, that being that people who are injured when they are one day less than 65 and working will receive substantially less benefits than those who are one day more than 65 and working.

For example, if a working person is injured one day before he turns 65, the bill assumes he will retire at 65 and therefore will be entitled to $185 per week. If the same person were injured two days later, when he was one day older than 65, if he were still working, he would be entitled to full benefits which would be scaled down over four years. We feel this is rather an easy thing to correct and would suggest you do so. Mr Chairman, I will turn this over now to our president, Mrs Leitch.

Mrs Jane Leitch: Care givers: When people grow older, unfortunately sometimes they change from healthy individuals to people who require daily care. This care is most often provided by their spouse. The problem with the care giver section in Bill 164 is that it simply does not recognize that an individual could be seriously injured in a car accident and then some time thereafter his spouse could require his assistance and no compensation would be available under the care giver section.

We appreciate the thought and effort that went into the care giver section, but would point out that drafters of legislation such as this must stop and think about the special needs of seniors. In this case, it is not good enough to simply look at the economic loss involved for people who are dependent on the injured individual, but you must also consider those who may be dependent on them in the future. We realize the many difficulties associated with the open-endedness of changing this provision, but would suggest that changes could be made with some reasonable sort of time limitations.

Cost: When looking at cost projections presented to us by various organizations, including the government of Ontario and the Insurance Bureau of Canada, it has become apparent that largely due to Bill 164, our members will see automobile rates increase between 4% and 20% next year. Regardless of who is right or what the final outcome will be, rate increases of 4% are totally out of the question. If in fact we have rate increases as high as 20%, we are sure we will go from situations where we receive very few complaints about automobile insurance to a point where this is the number one complaint from all our members.

Many times we hear from governments that an independent senior is a benefit to our society. Any form of increased costs to people on fixed incomes will force some of these people to change from being independent to being dependent.

Many organizations now rely on the high number of volunteers who are seniors to see that individuals they serve get the service they need at a reasonable cost. Most of these volunteers rely on their automobiles to function. We have heard in the past from such people as Meals on Wheels that automobile rate increases in excess of inflation will substantially reduce the number of volunteers they have. Quite simply put, we can't see the reason for, nor can we afford, the rate increases brought on by Bill 164.

The future: When Bill 164 was put together with The Road Ahead: Ontario's Strategy for Automobile Insurance Reform, we found ourselves extremely concerned about the direction that's being taken with automobile insurance. In the past, we have been faced by other governments with plans calling for uniform classifications, a fair rating system and the unfair use of age as a rating criteria. We note with disappointment that this government is once again going in this direction.

In the past, when the net result of these changes has been determined, our members would have been faced with rate increases as high as 45%. We see no reason why if we go down that same road we won't be ending up in the same place. As Albert Einstein said, "Those who repeat the same experiment expecting different results are doomed to failure."

To reiterate, it's our strong belief that Bill 164 and The Road Ahead will result in rate increases of 45%, or even higher, to our members. Once again, we're strongly stating our objections to this bill and are very concerned that the objections will fall on deaf ears.


Possible solutions: We can only see the following solutions to our present dilemma:

Do not implement Bill 164.

Reduce the benefits in Bill 164 in order that rate increases will not be necessary due to it.

Allow certain things, such as higher weekly indemnity limits, care givers' coverage, indexation etc to be optional at an increased premium. This would allow Ontario residents to purchase a basic product at the same price as they're paying today, and if they wish to then buy the additional frills, they can do so.

Our conclusion is, since we can find no benefits in Bill 164 for seniors in the province of Ontario and its implementation is going to result in substantial rate increases for our members, we have no choice but to strongly state to this committee that Bill 164 is a bad deal for the seniors of Ontario.

Again, on behalf of the United Senior Citizens of Ontario, I wish to thank you for this opportunity to participate in this very important discussion.

The Chair: Okay, Mr Jackson, you're up first.

Mr Jackson: Does that complete the deputants' presentation?

The Chair: I believe so. That was the conclusion.

Mr Jackson: Very good. First of all, Mrs Leitch, Mr Mansfield, welcome to Queen's Park. We're delighted to have you here today. As always, we appreciate your presentations.

At the outset, is there anything in this bill that you can agree with or that you find any merit in?

Mrs Leitch: I suppose there are always some benefits to us, Mr Jackson. They did add something about care givers that was something we asked for when we met the minister before, but it hasn't really gone far enough to cover our concerns, and he did tell us at that time he would look into that.

Mr Jackson: Had your legal counsel prepared any language of any amendments or any strengthening of that section that you recommended, any wording that could be helpful to the committee?

Mrs Leitch: Would you like to answer that, John, please?

Mr John Atto: Yes. I guess I'm insurance counsel, not the legal counsel. The situation would seem relatively simple to us in the question of the problem at 65 and what happens at that date, and that's simply words to the effect that you would get the greater of the two, because we do accept the fact that Bill 164 does restrict coverages in regard to people over 65 when that wasn't done before, but there is that problem.

In regard to the care giver section, the main problem we see is the length of time after the accident for someone else to find the problem. We would suggest it's just a simple question of putting a limitation in, like three years.

I don't think either one of them are legal problems. I think once the logic is there, the rest should be there.

Mr Jackson: Mr Chairman, has the government the benefit of any legal counsel on the questions raised by United Senior Citizens of Ontario? Essentially, they're raising legal questions.

The Chair: Is legal counsel here? Okay, what's the specific question?

Mr Jackson: The deputants have raised questions about the discriminatory nature of the 65 threshold and the presumption of retirement and the working/non-working component which is tied to age. Those are legal questions. There's been some recent court cases in Canada and in the US on this, and I just wonder if legal counsel has commented on the sections which the deputants have raised, because those are legal questions.

The Chair: Okay, Mr Owens.

Mr Owens: In a recent decision -- if the member for Burlington South would like, I can get a definite date -- the Supreme Court of Canada has ruled that 65 is constitutional with respect to retirement age.

In terms of what the member views as a discriminatory action against seniors, the auto insurance process is set up and designed to act as income replacement, and if the mandatory retirement age is pegged at 65, there's a fairly reasonable assumption that --

Mr Jackson: Mr Owens, without selling me on the concept, a member of your own caucus raised in private members' time --

Mr Owens: That's not the issue here.

Mr Jackson: -- the removal of 65 as a mandatory age of retirement, which most members of the House -- and I was present and participated in that debate -- supported. So a majority of your own caucus members support the principle of not discriminating against seniors at age 65, yet your own government has now presented it in legislation and you're reiterating that as a position.

Mr Owens: The issue is not what caucus may or may not have agreed on and what may or may not have occurred during a private members' hour. The bill is based on what is currently in law, what has currently been ruled on by the Supreme Court of Canada.

Mr Jackson: So what you're saying is, when there's a private members' bill suggesting -- and the majority of members of the House, of all three political parties, agree -- that seniors should not be discriminated against on the basis of age, that you, your party and your Premier are going to extend that discrimination in spite of the voices of the majority of the members of the provincial Legislature, when we stated very clearly, in an open forum, in a democratic forum that we should not be discriminating against seniors. Your Premier is going to fly in the face of those kinds of public decisions that were made and suggested in private members' hour?

Mr Owens: Again, the issue under discussion here today is not whether, constitutionally or philosophically, I or the Premier agree that mandatory retirement age should be 65, or in fact whether we should have a mandatory retirement age. The issue that we're here to discuss today is Bill 164 and the enhanced benefits that will be provided under that legislation.

Mr Jackson: How much time do we have left?

The Chair: You've got about 30 seconds left now.

Mr Jackson: Mrs Leitch, earlier today State Farm Insurance tabled a document, and I would like to furnish you with a copy of it as well because it sets out its projected costs for Ontario's seniors. It's frightening. We're looking at a 24% increase for seniors in the Metro Toronto area and the greater Toronto area, where they incidentally pay a higher fee for their licences as well.

Have you had an opportunity to examine these numbers? You mentioned a higher number but these are actuarially accurate. We would assume around 24%, 25% for your average members on a fixed income, when the government is suggesting that seniors should live independently in their homes, rely on a family member as a care giver, usually of the same age. How are you going to survive if your automobile costs are so prohibitive by virtue of the insurance costs?

The Chair: I'm going to go to Ms Haeck.

Mr Jackson: You're not going to let the deputant respond, Mr Chair?

The Chair: I --

Mr Jackson: I'll respect the Chair. It's your practice to cut off --

The Chair: Okay, go ahead if you can make a short response and we'll go on to the next question. I think you were making a statement there more than anything.

Mrs Leitch: We have a position on this and I think Mr Atto will answer.

Mr Atto: There is no question that 4% is a problem, let alone 24%, and then I think we feel very strongly that the 24% is ultimately, when taken with The Road Ahead, too low. We feel strongly that the number is 45%. This was done five years ago, and when it was all said and done and we got to the final numbers that were produced actuarially, we were faced with increases between 42% and 47%. So obviously we can't handle 4%. How can we handle 24%?

The Chair: Okay. Ms Haeck.

Ms Haeck: Yes. Thank you very much, and I do appreciate your coming out and giving us your views. I did want to make mention of the fact and at least respond in some part to what Mr Jackson has raised. I think we have what's called the battle of the experts, because the range of actuarial costs they have provided us is still, shall we say, a wide range. When the plan really comes into effect we'll be able to determine what in fact the true cost is.

We had the Quebec plan here this morning. They indicated that really, the kinds of benefits they're offering and what we're proposing to offer -- and they've had theirs now for about 14 years -- the cost factors are not unwieldy, and in fact it is much more on the lower end of the scale than whatever the Wyatt and Coopers and Lybrand studies have suggested.

Are you aware that the current system is under some pressure, in fact, to see increases which at this point are undetermined, which would be far in excess of what the industry is projecting?

Mrs Leitch: Yes, I'm aware of them.

Ms Haeck: You are?

Mrs Leitch: Yes.


Ms Haeck: Thank you. Are you aware that the government put something like $133 million into the home care budget during the fall to assist care givers in the homes so that with regard to disabilities there are additional home care services available to individuals like yourself?

Mrs Leitch: Yes, we're aware of that.

Ms Haeck: So that in fact some of your concerns related to the care giver sector might be allayed?

Mrs Leitch: It hasn't been indicated to us that they will pick up the difference there, that they would step in. I doubt it.

Ms Haeck: I believe if a doctor is prescribing home care, you would qualify.

Mrs Leitch: Well, that may be true. Do you want to comment?

Mr Atto: The problem that we're talking about in the care giver section is that to get care givers' benefits, at the time of the accident you must be taking care of someone. That we appreciate and that, I think, is a benefit. The problem we look at, and we know it can't be open-ended, is that when you're dealing with a husband and wife who are retired, quite often one of them gets ill and needs the help and that's the one we all expect to help them.

We are concerned that where one of the individuals is involved in an accident and at that moment the spouse is healthy and then, six months or a year later, they get ill and they're still claiming benefits under the policy, they would be the one that you would expect to help them, but they couldn't qualify for the care giver section. So all we're really asking for there is: This is something that could happen. Can we have something that says three years or five years, as long as the person who's injured in the accident is still collecting benefits? That's really the only problem we have with the care giver section.

Ms Haeck: I think that requires some more discussion and clarification and I appreciate that. You're happy with the kind of rehabilitation services that are being provided under this new bill?

Mrs Leitch: We haven't, at this point, received any complaints about that particular issue.

Ms Haeck: Since it basically kicks in almost immediately, it would really assist the person who is injured.

Mrs Leitch: Well, if it would come in, yes, definitely.

Ms Haeck: You've basically indicated in your brief that overall you felt that OMPP was generally satisfactory, but are you aware of any court cases that your members might have initiated and the kind of settlements or problems that may have arisen because of having to deal with the courts?

Mrs Leitch: We're stating in this document that we have not had a lot of complaints in the system as it exists now. We see some problems with the changes.

Ms Haeck: The fact that people could possibly be taking pain-and-suffering cases in a way that was not allowed under the original plan: Do you see that as an asset?

Mr Atto: I think that, to sort of answer both questions: Number one, the present system is bringing very few complaints from the members and not in the area that you're discussing. There are some benefits here. We're certainly not suggesting that there aren't benefits. The United Senior Citizens of Ontario last time supported the system because we felt that it would stabilize rates. Even though we didn't like the set of circumstances where the right to sue was being taken, the United Senior Citizens had decided that the overriding need, right at this time, for its members was to keep rates stable.

We're not suggesting that there are not some changes that could be made. We're not suggesting, to tell you the truth, that there aren't some changes that are benefiting it. It's just that it has to get back to the situation where the net result of this does not add to rate increases. We know we're going to be faced with rate increases of inflation whether we like it or not under any system, but we can't afford any more.

The Chair: We've got to go on to Mr Mancini.

Mr Mancini: Mr Mansfield, Mrs Leitch, thank you so much for coming before the committee to speak on behalf of the United Senior Citizens of Ontario. Have you been following the committee proceedings?

Mr Mansfield: To a point.

Mrs Leitch: Not all of it.

Mr Mancini: I want you to know that you've said many important things this evening. Some of the items you've emphasized have been touched on by other presenters, not in the same way, and I should say I believe you've left us with quite an impression, at least myself.

Members of the government started today for the first time to say that there might not be any rate increases. I was quite surprised to hear that, because their own consultant stated that rates would go up 4.5%. On your behalf, I'd like to ask the parliamentary assistant who is here representing the minister whether or not he could clarify that for the senior citizens of this province and whether the minister believes there will be rate increases as a direct result of Bill 164.

Mr Owens: To clarify both issues, first of all, members of the government did not say there would not be a rate increase.

Mr Mancini: Mr Johnson said it today.

Mr Owens: I'm surprised at Mr Johnson. Second, in terms of the determination of rate increases, as you are well aware -- I've responded to you on this question earlier today --

The Chair: Excuse me. Can you hear what he's saying?

Mrs Leitch: Not very well.

The Chair: Have we got some of these interpreters? Have you got one in front of you?

Mr Mancini: Couldn't we just turn up the mikes?

The Chair: We're getting feedback.

Mr Mansfield: We have an awful lot of conversations going on that are sort of interfering, especially when the lady here was asking the questions. There are too many other people talking.

The Chair: I have the same problem. I put this earphone in because I have a hard time hearing at times. I can't put them all in corners.

Mr Owens: Testing, one, two, three: Is that any better?

The Chair: I can hardly hear him, and he's next to me.

Mr Owens: I don't like to shout at my colleagues. On the first issue with respect to your comments around the government claiming there'd be no rate increase, no member indicated that on the government side. Second, in terms of the premium increases, there are two issues involved. First, the Mercer report talks about a systemic cost, not a per-premium rate increase. Second, if in fact premiums are to be increased, they will be judged on a company by company, case by case basis. There will not be a blanket increase, if in fact there is an increase.

Mr Mancini: That's the exact point I'm trying to make. The parliamentary assistant ended by saying, "If in fact there is an increase." We've had a lot of other important questions asked by individuals and organizations, and the government responds by saying it's appointed some committee that's going to do some work later on. They keep trying to sweep everything under the rug.

I'm quite impressed by just how up to date you are on what's happening here, because you've got the numbers right down. You are accurate. The senior citizens of this province are going to be hammered financially because of Bill 164, and there isn't a government member sitting in this room who can give good justification why senior citizens will have to face what I consider to be a regressive tax just for having the privilege of driving. Senior citizens in Toronto will have a 24% increase in their insurance rates, in Sudbury it's going to be 21%, in Windsor it's going to be 23%, in Ottawa's it's going to be 22%.

Mr Johnson: Who says?

Mr Mancini: I predict that thousands -- not hundreds but thousands -- of your members will be calling you soon after this government proclaims Bill 164. Further, I'd like to state the following: You know and I know that this government has reduced the number of drugs available at no cost to senior citizens because it has no money to pay for them, and is making senior citizens pick up the cost of those drugs. At the same time, these people have the temerity to tax --

Mr Owens: Mr Chairman, this is not pertinent.

Mr Mancini: You see, this gentleman keeps interrupting me. Does the parliamentary assistant have a point of order?

Mr Owens: On a point of order, Mr Chair: The issue under discussion here, first of all, is Bill 164, auto insurance. It is not a discussion --

Mr Mancini: I don't need to be lectured by the parliamentary assistant.


The Chair: I don't believe he's out of order if he wants to spend his time talking about everything else but the bill.

Mr Owens: I would ask the Chair to ask the member to keep his comments to --

Mr Mancini: I don't need to be lectured by the parliamentary assistant, who hasn't even been in the Legislature more than two years, about what's parliamentary and what's not parliamentary.

I want to know from the government what it's going to do to protect senior citizens who are living on fixed incomes, who are having their drugs declassified, no longer being paid by OHIP. When it doesn't have any money for that, I want to know from the government why it can hammer senior citizens another $200 to $400 a year just for the privilege of driving, with no added benefits. That's the question these people have come to hear. That's the question they want answered.

Ms Haeck: Would he like an answer?

The Chair: I'm sorry, but time is up. It's a pleasure having you here for the half-hour. There are different points of view, and if you watch a little longer, I think you'll find that everybody has a different opinion on this subject. I hope you'll be able to follow the rest of the hearings. Thank you for appearing before this committee.

Is Mrs Ann Dagleish here? No?


The Chair: I'd like to welcome the Coalition of Motorcycle Organizations. Would you mind identifying yourselves for the purpose of Hansard and for the citizens of Ontario. I know Mr Allan Johnson; introduce your colleagues.

Mr Allan Johnson: The coalition is a group formed as an umbrella council to provide input to government agencies and commissions on insurance. We've been active for the last six years. With me is Mr Bob Ramsay of the Motorcycle and Moped Industry Council, which is the trade organization for importers, manufacturers and distributors of motorcycles and equipment. Also with me is Mr John Cooper of Cycle Canada magazine, the largest publication of this nature in Canada; his subscription list is about 20,000 motorcyclists in Ontario. In the audience, too shy to appear, are representatives of the Canadian Motorcycle Association, the Ontario Road Riders Association and the Bikers' Rights of Ontario. They're also available to answer questions.

The Chair: We've got one more seat if one of them wants to come forward or if someone else has to come up. We're ready to go; we've got until 8 o'clock. If you can, leave some time at the end of your brief for questions from the committee members.

Mr Allan Johnson: The submission has been distributed, and there's a second submission from the Motorcycle and Moped Industry Council on the financial impact, as well as the combined brief on the complete situation. I will briefly go over a few of the important points, and then we'll take any questions you have.

Over the six years we've been active in dealing with the insurance question, all the way from the Osborne royal commission, through the Ontario Automobile Insurance Board hearings, through the no-fault hearings, through Bill 68 which brought in OMPP, through discussions with the Ontario Insurance Commission and the review project, several advances have been made in the provisions of motorcycle insurance for which we are certainly very grateful to all levels of government.

One in particular is the extension of accident benefits of the same level as for car drivers and passengers. This is not common, particularly in the United States, where motorcyclists are left without any accident benefits coverage in many states.

In order to make that extended accident benefits insurance cost bearable to motorcyclists, Justice Osborne proposed, the insurance board confirmed, and Bill 68 brought in the loss transfer clause. We understand that this has not been altered, although it is not clear from the draft regulations. It's section 9 of Ontario regulation 664; it's also dealt with in section 275 of the existing act. What it means is that in an accident where a motorcycle and a car collide, where fault is with the car, then any accident benefits over a $2,000 deductible are paid not by the motorcyclist's insurer but by the car insurer; in effect, it transfers the loss, the fault, to the at-fault vehicle.

This was Justice Osborne's concept to give motorcyclists a break, because they are very little likely to cause damage to anybody else in a collision. All our calculations on the cost impact, which I will get to in a moment, are on the basis that that loss transfer will continue; in fact, we do wish to see that $2,000 deductible dropped. That has made a substantial difference in the cost. We have discussed this with the actuaries of the insurance commission.

We have several amendments we are proposing. One is in the area of this accident benefits clause. We have done an estimate based on extrapolation from the Mercer study and the Wyatt study, one produced for the Ministry of Financial Institutions and one produced for the Insurance Bureau of Canada, as to the price impact. Those studies dealt with potential automobile increases. We've translated those to an impact on the motorcycle. Our best estimate, if you use the Wyatt estimates on the impact of the changes, is that under the proposed Bill 164 and the scale of benefits, the required premium increase for a basic motorcycle policy will be in the range of 21.6% to 28.4%. We quote a range, because there are several assumptions; we only have one and a half years of experience with the OMPP extended scale of benefits. If we look at the Mercer calculations, it looks like a required premium increase would be in the range of 12.9% to 19.3%. These are for the first full year of the new system and are based on the current level of transfer of accident benefits.

Either of these ranges are greater increases than we have had in any year since 1977; I went back that far. Increases have ranged from minus 0.1% to 12%, with an average over that 15-year period of 5.9%. Either of the ranges that appear to be going to occur would create considerable hardship in the current economic climate.

One of the things we would see is an increase in the number of motorcyclists who are riding without insurance. This has increased in recent years, according to figures supplied by the insurance commission to us just recently. In 1988, 6.9% of injured motorcyclists were not insured; in 1990 it was up to 9.4%. We would think it would be higher when premiums rose to that extent.

We do propose an amendment to remove the $2,000 deductible currently required by the Insurance Act, subsection 275(3). If that clause which reads, "No indemnity is available under subsection (2) in respect of the first $2,000 of no-fault benefits paid in respect of a person described in that subsection," were removed, it would reduce the required premium increase, according to our calculations, by about 5%. That's the price impact. That's still a higher price impact than the average increase we've had each year over the last few years. We think any further amelioration is in the government's hands as to changes in the scale of benefits or some other mechanism.


If price controls are considered, what we saw in the late 1980s, when price control was brought in while the system was being reformed, was that the insurance companies have several ways to deal with this limit to their price increases. Generally, they try to get out of the insurance business. They restrict their underwriting or they try to restrict the provision of benefits and become slow or absent payers. The third option, of course, is that they just simply eat the costs and live with them, but I don't think that's likely what's happened.

The next amendment we'd like to propose is concerning the issue of tied selling. We've had discussions with the insurance commission over the last two years on this business. Tied selling basically is when an individual walks into an insurance agent and asks for motorcycle insurance and he or she is told: "We have to have your car insurance or your house insurance as well. We won't write just motorcycle insurance." A variation on this is, "We'll write motorcycle insurance," but what they offer you is a Facility policy at about twice or more the rate of what you probably should be rated at if you have a good record.

While the proposed changes in the act do change slightly the wording of the clause under section 438 that makes this an unfair and therefore illegal practice, we think there should be an additional amendment to make the offering of a Facility policy an unfair practice as the person is not a high risk. The government has been trying to depopulate the Facility as far as automobiles are concerned. We think that many motorcyclists are now referred or threatened with a Facility policy in order to get other business from them. That shouldn't happen. We need a level playing field.

On our third amendment, often when you go in to buy motorcycle insurance you are rated not on the objective basis of your driving record or your claims history but on such things as make, model, size and type of motorcycle or even the visual profile of that motorcycle. Some people have been rated on what they're wearing or how they look. This is the kind of economic discrimination that has resulted in certain companies having what they call blacklists. Certain makes and models of machine will not be covered at all. Unfortunately, many of these machines are some of the safest machines made.

A classic example we brought to the attention of the insurance board a couple of years ago was the BMW K1 motorcycle. It had anti-lock braking, the first production motorcycle to have that, and yet Jevco, the largest underwriter, wouldn't touch it. Why? Because it had a fibreglass body or something, yet that machine was probably safer because of its anti-lock braking equipment. It looked like it might be a fast motorcycle. "Well, it has to have a big engine because it requires a large amount of electricity to drive that anti-lock braking system."

Occasionally, there's a different version of a blacklist. It's called a whitelist. In this case, the company will insure only certain makes and models that it predetermines, that it thinks are the cream, likely not to be in accidents. I believe you had appear before you earlier one company that writes motorcycle insurance that has a whitelist.

We would like to see an amendment to the basic third-party accident benefits policy that making use of the type, model, size, vehicle profile of a motorcycle is an unfair practice in rating. It should be on the driver and on the record of that driver.

There are several other issues I'll just touch on quickly. There's a lack of availability of insurance for off-road motorcycles that are licensed under the Off-Road Vehicles Act and trail-type motorcycles of limited use that are licensed under the Highway Traffic Act; similarly, a restriction in the availability of antique and classic motorcycle insurance. Only two firms in Ontario at the moment will write this kind of coverage.

We do think, and we've proposed this several times before, that there will be a lot of technical details, minor problems, whatever the final form of this act is, when it goes into force. We would like to see a motorcycle insurance advisory committee made up of government, the insurance commission, the insurance industry and motorcyclists to sort out some of these niggling details that legislation will never address. We're quite happy to sit down with groups of people. We've been sitting regularly with the insurance commission over details. It's been very helpful. We understand the system better. They understand our particular problems and we think progress in that may be best made in a friendly atmosphere.

We think there needs to be a public review of rate increases. Motorcycle insurance is essential, you have to have it, although some people certainly try to get away without. But we think we have to have a public mechanism, just the same for utility rates, that people can see what the cost requirements are. If your telephone rates are under scrutiny, your electricity rates, so should your insurance rates be under public scrutiny.

We need a standardized classification and rating system for motorcycles. We've been working with the insurance commission in regard to this in its work with the insurance advisory organization to get something like this. We'd like the committee to suggest that we move more rapidly on it. It would make comparison shopping easier. I think it would encourage small insurance companies that don't write insurance now into the market.

I just touch on motorcycle safety. There's been some criticism in advertisements on the radio that we've heard recently that this bill does not address road safety. Of course, that's under the new road safety agency act, I guess, that's coming up, but motorcyclists have been very active for a very long time in improving safety in motorcycles.

Data in this report we've given you show the great reduction in fatalities over the last few years. The industry provides a large number of motorcycles for training purposes. Two out of every three motorcyclists getting their full licence last year in Ontario had been trained through the community college system. We think this is one of the big factors in reducing accidents, injuries and fatalities, and we know that's the only way. Improved safety's the only way to try keeping insurance costs down, because while insurance may pick up the pieces, you always wish you never had the accident in the first place. I will now shut up and take questions.

The Chair: Great, Al. Okay, we'll start off with Mr Mancini.

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

The Chair: We have a total of 12 minutes between the three parties.

Mr Mancini: Sir, you join a chorus of other groups and organizations and individuals who have come before this committee and told us that your rates are going to go up. I might as well get right to the point: Do you think that the benefits in Bill 164 are worth the increase in rates?

Mr Allan Johnson: It's going to be hard to convince the motorcycle industry of that. Do you want to discuss that, Bob?

Mr Robert Ramsay: I can touch on that very briefly. In our short little addendum to the overall submission we have tried to calculate what sort of impact this will have -- yes, that particular one -- on the industry as well as on motorcyclists. We estimate that the number of motorcyclists who have no insurance will actually increase. It's a trend that seems to be growing and it will mean about another 6,000 motorcyclists will operate their motorcycle without insurance.

Because motorcycling is not something that you have to do, it's something that people choose to do, and if they're only choosing to do it three or four months a year or five or six months a year, sometimes the costs can quickly outweigh the risk factor, or the perceived risk factor, of not having insurance. So we believe a very significant impact will be that some motorcyclists choose not to have insurance. This is a very negative thing for the social fabric of Ontario and we think that's not a very healthy thing. Affordability of insurance is key and vital to all Ontarians, and without affordability, then it's counterproductive.


Mr Mancini: So the first effect then, in your view, of Bill 164 is to pretty well negate the intent of the road safety agency.

Mr Robert Ramsay: I wouldn't say that precisely. What I would say is that some motorcyclists will benefit. Each person will make his decision on his own, but some people will choose to act outside of what is in the social best interests of all Ontarians.

Mr Mancini: But if we add another 3% or 4% of all motorcycle riders on top of the 6% or 7% who now don't buy insurance, I'm not sure what the road safety agency is going to do if on one hand it would make it impossible for people to buy insurance.

My other question, and I'd like to direct my question to the gentleman who made the presentation, is whether or not your association has received extensive criticism about the current legislation.

Mr Allan Johnson: I think the increased accident benefits are seen as a positive thing, because roughly 40% of motorcycle accidents are single-vehicle accidents where there's nobody to sue. This is the only consolation.

Mr Mancini: How do you people feel about the loss, or I should say the --

Mrs Caplan: Inability to sue for loss.

Mr Mancini: That's right, the inability to sue for economic loss?

Mr Allan Johnson: I don't think motorcyclists, being the independent sort, have ever taken lightly the idea that rights that have been entrenched since the days of the Saxons -- the right to sue somebody, the right for compensation -- have been taken away. On the other hand, I know of a number of cases where tort provided no consolation. I had a gentleman come to me just a few days ago. He's been four and a half years trying to get a resolution of a case where he was hit by a drunken uninsured driver. He's had $1,200 compensation in four and a half years.

Mr Mancini: My final comment --

The Chair: Wait a minute. Mr Harnick, you're on now. You've had your time there.

Mr Harnick: Sir, I have had the pleasure of acting for people who've been involved in motorcycle accidents, and the one thing that I find when I'm acting for people who have been involved in a motorcycle accident is that generally they are badly hurt after an accident, particularly when it's an accident with a car or with a truck. I'm sure you'll agree that this in fact is usually the case. Am I correct about that, that generally accidents can be very severe, dealing with motorcycles?

Mr Allan Johnson: They can be.

Mr Harnick: And often are.

Mr Allan Johnson: Although the Osborne report found that there were fewer incidents of head injuries among motorcyclists than among car and truck cases.

Mr Harnick: They wear their helmets, and fortunately their helmets work. But you often see bad fractures, bad internal injuries, facial injuries sometimes, if there's not a mask.

But what concerns me about this bill is that someone who might be badly injured or killed is not treated very well under Bill 164 in terms of being able to claim for his or her actual economic loss. If someone's making $35,000 and has two dependants and is an innocent victim of an accident and is killed, the most his or her family can get to support them for life is $120,000. I wonder if you can give us some comment.

Mr Allan Johnson: That doesn't include an option under the Family Law Reform Act, does it, to soothe the pain and suffering and loss of enjoyment and all that sort of thing for the surviving?

Mr Harnick: Let me tell you about that. The people who get to sue for their loss of guidance, care and companionship under the Family Law Reform Act have to kick in a $5,000 deductible; so after you've given up what really is a $700,000 loss of income, you're also giving up $5,000 per claimant under the Family Law Act. What I put to you is, is that fair for an innocent victim who, under this plan, will be paying an additional 20% to 30% in premiums?

Mr Allan Johnson: I'm not sure. We've had long discussions about the advantages of tort versus increased accident benefits. Generally, I think it's ended up coming down on the side that the increased accident benefits, if affordable under the loss transfer thing -- everything is a compromise, and it might be the better way for motorcyclists. Certainly, they were losing out under the previous system.

Mr Harnick: Let me explain another thing. The OMPP --

The Chair: I'm sorry, Mr Harnick. We go over to Mr Klopp. Four minutes are up.

Mr Klopp: Good evening, gentlemen. I found your brief very interesting. One of the things with this whole business of the review of Bill 164 is trying to find that balance; telling people in my riding who are automobile drivers plus motorcycle drivers that they need to have better coverage. You've brought out a couple of examples. Yes, there are some where there's the hero, like winning the lottery, but there are a lot where it's a real crap-shoot. Where do you get the balance? My question about the increases and the number of issues you can take on -- as you say, many times the motorcycle is a single-vehicle accident; it's you and the tree, and usually you can't sue the tree. You can maybe cut it down, but you can't do much else with it. On the whole, is this not a better system than what we've had before, keeping in mind that we want to keep the rates affordable?

Mr Allan Johnson: We'll soon know, I suppose. I think one of the great problems in this setting is that it was changed to an increased benefits system and there are literally 18 months of experience with it. That's what actuaries we've talked to are saying. You just can't tell how some of these are going to work out in the long run. That's why there's the uncertainty about it. We're not any more certain, have no clairvoyance, perhaps less than some other people would.

But your party has the majority and wants to see this, and we think there's going to be a cost impact. We've suggested one way to reduce it somewhat, but there may be other things that have to be done. We have no clear answer to that, except that if it is too high a price impact, the same thing might happen as happened in 1990: People were unhappy with the eventual system and voted for somebody else. If they vote for somebody else again, we're going to be back revising the system again, and there we go. It could well happen. We're just trying to get a system that we think motorcyclists can live with and can be economically affordable and will pick up the pieces better than it has in the past.

Mr Robert Ramsay: Mr Chairman, if I may make one quick comment on that particular question, I think that's the real crux of this whole issue, particularly as it applies to motorcycles. We don't have enough information and I think -- this is my concern -- the government and the opposition parties don't have enough information on how this is going to affect motorcyclists. Every study we've seen deals with automobiles; nothing, absolutely zero, zilch, zip, nothing deals with motorcyclists. So to sit here tonight and say, "Yes, we love this," or "No, we hate it," is inappropriate. What we have to do is get more information before an intelligent decision can be made. I would ask this committee to recommend that there be a study on motorcycle insurance, see the impact, and then we can all make an intelligent decision.


Mr Mancini: Why hasn't the government done one?

Mr Klopp: I guess that's why they have committees. When I first got here, I wondered why we needed to have committees and stuff like that. But that is exactly why and why we're here listening. You pointed out the view that, okay, we've increased benefits but that they have to be affordable; on the other hand, there's never been a whole lot of discussion about motorcycles. I certainly hope MFI is listening.

The Chair: How many licensed motorcycles are there in Ontario, and how many motorcycle-licensed riders? I know there's quite a difference. Just give the people of Ontario an idea.

Mr Allan Johnson: There were 109,865 motorcycles licensed in 1991. There are 460,000 people who have at some time or other passed a motorcycle test and would still be legally permitted to go out and buy a motorcycle, get on it and save gasoline and the rest. One thing I just might add is that motorcycle insurance, if you look at the figures on page 11, is continuing to be quite profitable with the insurance companies, so they do have some margin. These are the official 1991 figures given to us by the insurance commission. It has been a profitable line; these figures do not include investment income, of course.

The Chair: If I don't see you beforehand, we'll see you in the first week of May here at Queen's Park, out in front, okay?

Mr Allan Johnson: Thanks very much, Mr Hansen and committee.


The Chair: Mrs Ann Dagleish, come forward, please. I'd like to welcome you to the standing committee on finance and economics on Bill 164. We have 20 minutes.

Mrs Ann Dagleish: I'm sorry to be late.

The Chair: That's fine. It's cold out there. I'll bet your car didn't start.

Mrs Dagleish: No, the taxi driver got lost. It's not my fault.

The Chair: I can tell you, we ordered pizza from just two blocks away when we sat until midnight. We kept waiting for the pizza. It didn't show up; he didn't know where Queen's Park was. So a lot of people in Ontario don't know where we're at.

If you don't mind, in this 20 minutes, could you leave some time at the end for questions from the committee? They usually like asking questions of your presentation. You can have it for five minutes and 15 minutes for questions, or however you want to split it up; that's your 20 minutes.

Mrs Dagleish: Thank you for giving me the opportunity to tell you how I feel about the car insurance plan which you are considering for people like me. I am in a unique position to comment on the proposal, because I am the only person in Ontario who can say that the judge has considered my injuries and determined that they cross the threshold in the present car insurance system.

I am a 77-year-old widow and a grandmother, and I live alone in a small house in Collingwood. Until my accident in September 1990, I enjoyed excellent health and was able to cut my own grass, shovel my snow and driveway and get my own groceries and all the necessary jobs around the home. I really enjoyed my independence.

I won't take the time to give you the details of my accident and the troubles after it happened. You should know that I was entirely innocent in the accident and that the injuries have changed my life drastically. My spleen was ruptured and removed. I now have a long scar on my tummy. My neck and my back have been such a problem that I no longer am able to do jobs at home as I used to. I experience almost constant discomfort.

Because I felt it was wrong that I should not recover compensation for my pain and suffering, I went to a lawyer. He told me about the threshold, and it sounded very unfair to me. I told him to sue anyway. I did it for other people as well as myself.

When the Meyer case was decided, my lawyer told me that the judge said an injury would have to be nearly catastrophic and much more serious than mine to cross the threshold. I thought that seemed very unfair to innocent people, and I told my lawyer to go ahead.

Then the insurance company asked the judge to decide if my injuries did not cross the threshold. The insurance company attempt backfired, because the judge decided that my injuries were serious. He said that I should not be penalized because I am a senior and don't have to live with the problems I have as long as a young person would.

My lawyer told me that neck and back problems, my scar and the loss of my spleen are probably worth $15,000 each. In other words, if there had been three people in my car who had each sustained these injuries, each person would have a claim for about $15,000. Under the proposed system, each of these people would have injuries which, according to the judge who decided in my case, would get $15,000 in compensation.

Under your proposal, each one of these claims would be reduced by the proposed deductible of $15,000. As a result, these people would get nothing. What could be fair about that?

When the NDP campaigned for office, it said it would restore the rights of innocent people. My case demonstrates that this new law breaks that campaign promise.

I would also like to say something about the way this proposal will hurt grandchildren. You are taking away the right of even the seriously disabled to sue for anything except for pain and suffering. What if one of my grandchildren were terribly injured? Under your proposal, my grandchildren cannot claim a penny of any of the cost of providing the care they deserve over and above what your chart allows. Under your proposal, my grandchildren are stuck with the average industrial wage in Ontario or their wages at the time of the accident. The right that was left to them under the present threshold scheme to recover wages based on what they might have become, is taken away. I cannot understand why you are doing that to innocent children.

I'm not able to answer tricky questions about the good and the bad things in your proposal. I'm sure there is some good. I can tell you what seems fair to me and other seniors like me, though there are some things about this that just don't seem fair. Thank you for listening to me.

The Acting Chair (Ms Christel Haeck): Thank you very much, Mrs Dagleish. We do appreciate your comments. I will turn to Mr Owens to begin the questioning.

Mr Owens: Thank you, Mrs Dagleish, for coming here this evening. I'm sure it's difficult to come to a committee and talk about a personal experience such as you've had.

I want to agree with you that the threshold under the current system is unfair. You've had some limited success, as I understand it from your presentation, in fighting that threshold to date. Is that correct?

Mrs Dagleish: Yes.

Mr Owens: And are you still in front of the court, at the court of appeal now?

Mrs Dagleish: No.

Mr Harnick: Do you want me to clarify?

Mr Owens: Are you the counsel?

Mr Harnick: Well, I've read the case. Do you want me to clarify so that everybody understands, or do you want me to sit here with my hand over my mouth?

Mr Owens: With your tort in your mouth? No, if you could clarify that.


Mr Harnick: If you think what happened to this lady is funny and you want to make jokes about it, go ahead. I don't think the loss of a spleen is very funny; you might think that's a very amusing thing. What's happened to this lady is that a preliminary motion has been brought to see if her claim makes the threshold. At that motion, the judge decided that, as of that day, her claim made the threshold. When she goes to trial, probably six months or a year from now -- I don't know what stage the case is at -- I suspect the defence lawyer will bring another motion at the opening of trial and again ask for consideration as to whether the claim meets the threshold. That's the situation she's in. I think the importance of this witness is that she extrapolates, based on what her lawyer tells her her case is worth, what she would get under the brilliant system now before us, which is Bill 164: For loss of a spleen, she gets zero.

The Acting Chair: We appreciate your legal interpretation. I will now turn the floor back to Mr Owens to continue.

Mr Owens: We've had presentations from insurance companies and legal counsel, and one of the suggestions that came out during a presentation from a company called Progressive Casualty was that we not have the kind of test that we have envisioned in our legislation, but that we have a verbal threshold as well as a monetary deductible. How would you feel about that, the increased lack of access you would have had? You're now two years after your accident and you're still going through the legal system. How does that make you feel?

Mrs Dagleish: It's such a long process; it doesn't make me feel too good.

The Acting Chair: I have to turn the floor over to Mr Mancini at this point.

Mr Mancini: Mrs Caplan has a number of questions she'd like to ask.

Mrs Caplan: I appreciate your coming today. It's important for us to hear from individuals how this is working. I know how disappointed you are with the NDP government, which promised it would have full tort for both pain and suffering and economic loss within a full government-run system. That was their campaign promise. Your coming here today and reminding them of that I think is very important, because Bill 164 is not what they promised. The concern I have is that you are going through the process of the existing legislation and -- the United Senior Citizens of Ontario, which was here just a few minutes ago, had this to say on behalf of seniors:

"We have received very few complaints about the present method of claims handling, either for bodily injury or property damage. Improved claims handling and efficient delivery of accident benefits appear to be a direct result of the current legislation.

"Another benefit to seniors has been premium stability....our members have been pleased with the stability over the last two years."

They're very concerned because they believe, as the evidence has been put forward, that senior citizens in Ontario will see auto insurance rates increase between 4% and 20% next year.

You're going through a situation where you don't know how the existing bill is working, because you haven't finished your court case. We have heard people coming before the committee saying, "This bill makes the present system worse." They have said that the government should withdraw the bill and wait till we have the result of cases such as yours to see what improvements should be made. In fact, that was the recommendation of the senior citizens' alliance: "Why don't you just wait a little bit" -- I'm paraphrasing now -- "and give the present system a chance to be fully studied and reviewed?" so we can look at the results of cases such as yours.

What I wanted to ask you, given all the suffering you have had, is whether you think, before they rush ahead with amendments that are going to make it worse -- particularly for your grandchildren and young people, because they can't go to courts even when they do meet the threshold requirement to sue for economic loss -- that they should pull the bill, withdraw the bill and wait until they've had a little more experience.

Mrs Dagleish: I don't know.

Mrs Caplan: You don't know? Thank you.

The Chair: Mr Harnick.

Mr Harnick: Mrs Dagleish, these are pretty tough questions -- I appreciate that -- because what you've been asked is to compare Bill 164 to the Ontario motorist protection plan, which is what you're dealing with, and they're both pretty bad, aren't they? You have to answer yes or no.

Mrs Dagleish: Yes.

Mr Harnick: What I want you to tell us is, how serious was your injury?

Mrs Dagleish: Serious enough. I had never had an operation in my life and then they took my spleen out, and I had two cracked ribs and I had a great big cyst on the side of my stomach which was very irritated and sore, and I was bringing up all the time. The doctor wanted to operate again on my cyst, but I didn't want another operation. I thought, "Oh dear, not again." But everything is sore enough, and then my neck is sore and my back is sore.

Mr Harnick: And those pains are continuing, I'll bet.

Mrs Dagleish: Yes.

Mr Harnick: Tell me, how does it make you feel that under the previous scheme you could have got kicked out altogether and been told, "Sorry, it's not serious enough," and under the scheme the other side is proposing, the new bill, you have to give up $15,000, and all you're going to get is maybe $15,000 or $20,000. How does that make you feel?

Mrs Dagleish: It makes me feel terrible.

Mr Harnick: Is it right?

Mrs Dagleish: No, it's not right.

Mr Harnick: Tell these people why.

Mrs Dagleish: Why should I suffer? I was innocently hurt, and why should I suffer without any compensation?

Mr Harnick: If your lawyer does a really good job -- I know who he is, and he will do a really good job -- and you get up to $20,000, how does it make you feel at the end of the day, when you have $5,000 to show for it, because your $15,000 had to go to pay the insurance scheme to pay drivers who were at fault?

Mrs Dagleish: I don't feel good about that at all. It's not right.

Mr Harnick: Thanks, Mrs Dagleish. I appreciate that.

The Chair: I'd like to thank you for appearing before this committee. You did a real good job.

Mrs Dagleish: Thank you. I tried.


The Chair: The next presenter is Keith Harris. Welcome to the standing committee on finance and economic affairs. I guess you've been here since quarter to 7; I met you on the stairway outside. We have 20 minutes, and in that 20 minutes, would you leave a little time for questions at the end for the three parties? You may begin.

Mr Keith Harris: I'm here on behalf of myself, as an accident victim three days after the existing no-fault insurance act came into effect. I'm here to ask you, as people who are taking care of my life, before you even consider Bill 164, to go back and clean house and make sure the original no-fault insurance is working, because it is not. I'm asking that you make amendments; that if you do go ahead with Bill 164, previous accidents under the existing no-fault system be included in that.

As of tonight, I'm in the hospital for back surgery tomorrow morning, resulting from the accident of 1990. I really don't know what else to say. All I can say personally, as an injured victim, is that I have no rights to sue as of today. I would hope you people listen and go back and clean house and make sure the bill works properly before you go ahead and change it to something else. That's all I really have to say.

The Chair: Can you elaborate a little more to give the committee a better idea? I know it's right here. We've got your brief; I don't know whether all the members have been able to go through it. You got hit? You're a motorcycle rider.

Mr Keith Harris: I was. I will never ride one again.

The Chair: Has everyone had a chance to read the brief? Are you ready, Mr Harnick?

Mr Harnick: Oh, I think I can be.


The Chair: The thing is, though, that a lot of people in Ontario are watching this and they don't have a copy of the brief. Maybe you could give a little bit of history.

Mr Keith Harris: To start with, I claimed benefits under the no-fault benefits act. They were paying me $600 a week. I've been off for over two and a half years, unable to work, due to the injuries from the accident. Out of the first 14 months, benefits were held up for six months; I went without pay for a period of six months within that 14 months. And as of just a little better than a year ago, I am totally cut off benefits due to their doctors stating that I am fine. Their doctors turned around and stated that I needed to have a CAT scan done and told me they would take care of it, and they never did anything. So I proceeded on my own to have a CAT scan done, and that is the result. I am in the hospital tomorrow morning for back surgery.

The Chair: Could you describe the accident you had?

Mr Keith Harris: I was going northbound, on an absolutely clear day, on the inside of a double-lane street and a lady was coming southbound and made a left-hand turn in front of me. I had no alternative other than to dump the bike or go directly into the side of her car. I chose to dump the bike.

The Chair: Were there any charges laid?

Mr Keith Harris: Yes, she was charged, but I was notified one day after her court case that I was subpoenaed to go and testify.

The Chair: That gives everybody a better idea. Mr Harnick.

Mr Harnick: How much time do I have?

The Chair: About five or six minutes.

Mr Harnick: There's no question, sir, that you were the innocent victim in this accident, is that correct?

Mr Keith Harris: Yes.

Mr Harnick: And no one paid you your no-fault benefits without a fight, is that correct?

Mr Keith Harris: I've constantly fought for two and a half years.

Mr Harnick: Then you ultimately went to the auto insurance board and you got your money. Is that correct?

Mr Keith Harris: No. In reality, the Ontario Insurance Commission did 11 mediations with the insurance company. The insurance company refused to cooperate on 11 different occasions to give the information to the Ontario Insurance Commission. At that time, the mediator in the Ontario Insurance Commission deemed that mediation had failed; I don't have that paper with me. That is when they came up with the offer of less than what they owed me for my weekly benefits, and I had to sign a piece of paper stating that I received absolutely no more medical benefits from them.

Mr Harnick: Have you been able to claim for your pain and suffering as a result of this accident?

Mr Keith Harris: No. I haven't even got to court yet.

Mr Harnick: Why have you not been able to claim for pain and suffering?

Mr Keith Harris: There's nothing to sue for. There's no threshold been set.

Mr Harnick: Have you been told by a lawyer that you won't reach the threshold and therefore that your claim for pain and suffering is worth zero?

Mr Keith Harris: He does not know whether or not I'm going to be able to claim for passing the threshold.

Mr Harnick: Ah, so you have a lawyer acting for you and you're waiting to see if you're going to meet that threshold. Is that correct?

Mr Keith Harris: Yes, and the funny point is that when no-fault insurance came into effect, you were not supposed to need a lawyer to deal with your insurance problems.

Mr Harnick: Tell me, could you have dealt with that insurance company without a lawyer?

Mr Keith Harris: Absolutely not.

Mr Harnick: Otherwise they would have beat you up even worse, is that correct?

Mr Keith Harris: They already have beaten me up, even with a lawyer.

Mr Harnick: Tell me this: What kind of surgery are you having tomorrow?

Mr Keith Harris: I'm having a herniated disc operated on.

Mr Harnick: That case is probably worth around $20,000 or $25,000, in my experience.

Mr Keith Harris: I can't put a dollar figure on it.

Mr Harnick: How would you feel under this Bill 164, if your case was worth $20,000 or $25,000 -- and you've gone through the surgery a couple of years after. You couldn't settle the case before the surgery, correct?

Mr Keith Harris: Right.

Mr Harnick: So you're going to settle the case some time after the surgery. Under this Bill 164, if it had been the law when you had your accident and you were going to get $25,000 for your herniated disc, assuming the surgery is successful, they'd take $15,000 away from you.

Mr Keith Harris: Why? I already paid my deductible for my accident. I've already paid the deductible.

Mr Harnick: You see, under the new scheme that my friends across the way are proposing, they say that somebody with a herniated disc who will get $20,000 or $25,000 has to give back $15,000.

Mr Keith Harris: For what?

Mr Harnick: Well, you see, they're trying to get rid of the little, insignificant cases. Now, tell me, do you think that your herniated disc and your sore back are a little, insignificant case?

Mr Keith Harris: No, I don't.

Mr Harnick: I mean, it's not a little three-week or six-week or four-month or six-month whiplash case, is it?

Mr Keith Harris: No, it's been two and a half years now and it's going to be at least another year or two before I'm even trying to figure out if I'm going to be okay.

Mr Harnick: That's right, and under what these people --

Mr Keith Harris: With no benefits.

Mr Harnick: Under what these people are proposing in Bill 164, if you're lucky you'll get $10,000, because they'd take $15,000 away. Can you accept that?

Mr Keith Harris: No. I can't see how they can justify it.

Mr Harnick: Under the bill that we're working on now, you know that if the surgery is successful your injury won't be permanent and serious, because you'll be better, and you know what'll happen then?

Mr Keith Harris: What is permanent and serious -- or "disfiguring" is the word I was looking for.

Mr Harnick: Let me explain something to you. If your surgery is successful and you're all better, your injury won't be permanent and serious, and you know what you'll get under the Liberal plan --

Mr Keith Harris: I have no idea.

Mr Harnick: -- for your pain and suffering? You'll get zero. What do you think of that?

Mr Keith Harris: I don't like it at all.

Mr Harnick: So under that plan you get zero and under their plan you get $10,000, and you've had a herniated disc and major surgery. What do you think of these brilliant insurance schemes that the NDP and the Liberals came up with?

Mr Keith Harris: I have to be honest with you. I'm not interested in the final dollar figure; I'm interested in what's available to me right now as an injured party. I don't care about the lawsuit.

Mr Harnick: It might be zero.

Mr Keith Harris: It's zero what I'm getting right now.

Mr Harnick: And it might still be zero. What do you think of that?

Mr Keith Harris: I think it stinks.

Mr Harnick: Thank you.

The Chair: I've got to go on. Mr Johnson.

Mr Johnson: That's a very unfortunate circumstance you find yourself in, Mr Harris. You have my sympathy, believe me. Under the present system, the system that you're under, obviously you're having a lot of difficulty.

Mr Keith Harris: From day one.

Mr Johnson: You're not getting any satisfaction whatsoever.

Mr Keith Harris: No. All I know is I owe over $15,000 in legal fees.

Mr Johnson: Under the new system, the system that we're proposing, that is Bill 164, Mr Harnick has suggested that you will be able to sue for lost income. I think that there's no guarantee that you'll be able to recapture any of that lost income when you undertake litigation such as that. I think it's evident that the only thing we know for certain is that if you're going to have a lawyer and you're going to go and fight for what you think you are entitled to, if you don't get that by reason of some technicality in a court of law or for some other reason if you're not successful in your court case, the only person with any certainty we know for sure is going to get any money is going to be the lawyer, because lawyers always get --

Mr Keith Harris: And the insurance companies.

Mr Johnson: And the insurance companies; that's right.

Mr Keith Harris: They're collecting the policies and not paying anything out. They haven't paid one penny towards medical expenses for me whatsoever.

Mr Johnson: That's right. In fact the insurance companies have been making some very handsome profits in the last couple of years and that would be some of your contribution, no doubt, for sure.

Mr Keith Harris: Yes. I look at these figures here. They've made $7 million last year -- profit.

Mr Johnson: Well, actually, they made a lot more than that.

Mr Keith Harris: That's just on motorcycle policies.

Mr Johnson: Okay. I just want to ask you some questions about changes that we propose. Under the new system, the system that we're proposing, Bill 164, we're going to make some improvements over the old system with regard to benefits for people who are in circumstances not unlike your own. Presently, there is a benefit of about $600 weekly. These are income replacement benefits for people who have a disability. At least temporarily, I would believe you've had a disability; in fact, you may still have a disability. I notice that you came in here with a limp. Is that right?

Mr Keith Harris: Obviously, if I'm on the operating table tomorrow at 12 o'clock, I have a disability.


Mr Johnson: So the new proposal offers a maximum of $1,000 weekly, but at least a minimum of $185 if you meet a disability test.

Mr Keith Harris: And who makes up this disability test? The insurance company doctors.

Mr Johnson: No, this would not be the case in this circumstance.

Mr Keith Harris: I've got it right here in front of me. The insurance company doctors are the ones who rule who gets what.

Mr Johnson: I just want to tell you, Mr Harris, that's under the system that you are being dealt with right now.

Mr Keith Harris: That's why I'm asking you, as the people who are running my life right now, to turn around and amend it to include me in what you're doing right now.

Mr Johnson: Okay. I think that we hear you loud and clear and I think that's what we're attempting to do in the changes to this particular --

The Chair: Mr Klopp, did I see your hand up?

Mr Klopp: No, it's fine.

The Chair: Mr Johnson, go ahead. I thought Mr Klopp had his hand up there.

Mr Johnson: Let's just talk about the insurance companies for a minute. While you're so concerned --

Mr Keith Harris: I'm so concerned that this insurance company is holding one of the biggest shares of the Ontario market and it's not even an Ontario company, and it is not paying Ontario citizens the benefits that they're entitled to.

Mr Johnson: It's a very fair point. I just want to ask you this question: Do you think that if we were to improve the benefits under the new system, when compared to the old system --

Mr Keith Harris: I personally think the benefits that are in place right now are pretty darned close to being fine, if you have a body that's willing to turn around and make sure they are given out properly.

Mr Johnson: Then obviously there's something wrong with the system.

Mr Keith Harris: Obviously.

Mr Johnson: If you can't access what you believe you deserve under the present system, then there's got to be something wrong with the system.

Mr Keith Harris: Under the present system, it states in the Ontario Insurance Act that after three years of a permanent disability, if you are permanently disabled, it turns into a pension. I've lost that; I've lost the total pension for the rest of my life because of this.

Mr Johnson: Someone's determined that you're not totally disabled.

Mr Keith Harris: I don't know how anybody --

Mr Johnson: Is that what they told you?

Mr Keith Harris: Yes. The insurance company's doctors have told me I'm not disabled, but I am presently collecting income security from the federal government, which has declared me permanently disabled. You tell me how that can work.

The Chair: I've got to go on to Mr Mancini.

Mr Mancini: Mr Harris, having had a number of years' experience dealing with the Workers' Compensation Board, the first thing I'd like to say is, in regard to the information you've made available to us and through the testimony that I've heard that you've given to my colleagues, yours is almost identical to dozens, if not hundreds, of workers' compensation cases that I've handled on behalf of injured workers over the last 18 years. When people in this room express surprise to you that there's a breakdown in the system, please don't believe them, because there are breakdowns in every system. If you ever had to deal with the Workers' Compensation Board, as everybody in this room sitting at this table has had to --

Mr Keith Harris: As a matter of fact I did, because this is one of the problems I have run up against. I have had two previous discs removed from a workers' compensation claim. I am working on my third disc removal right now.

Mr Mancini: So let's not be overwhelmed by a member of the Legislature saying: "There must be a breakdown in the system. It's all got to work perfectly." It's human beings who are handling all of this and yes, there are breakdowns. But I find some of this very curious and difficult to follow. I'd like to ask you a couple of questions. I'm sorry I don't know more about your case; I only know what I have in front of me.

Mr Keith Harris: I could only give what I have in front of me, because I only had three days' notice as it was, coming here.

Mr Mancini: That's fine, sir. I appreciate that. It says that you had the accident and you were taken to the Scarborough General Hospital by ambulance and that you were released the same day. How was that possible with the tremendous injuries that you sustained?

Mr Keith Harris: There we get into another whole different realm of situations that I'm negotiating with my lawyer right now.

Mr Mancini: Thank you. Then it says that you were admitted to the hospital thereafter and there were some tests done and some skin grafts, and there were some X-rays of your back area, but they were inconclusive. I just don't know how so many mistakes can be made on one person's accident claim. First, you were released the same day, after sustaining what I presume to be some terrible injuries, you had to go back for some tests and for some medical treatment, X-rays were taken and they were inconclusive. I find all of this very difficult to understand.

Mr Keith Harris: Me too. The next day, when I was readmitted to the hospital, I was put up in a room and left for 10 days. My doctor came back to me and said, "Keith, I am very sorry, but I missed the skin graft on the side of your leg." All he did was suture up two lacerations in my leg to repair a tendon that was cut to my big toe, which does still not work to this day. The actual injury for the skin graft was no more than an inch and a half away from the laceration that he sewed up for the other part.

Mr Mancini: My personal belief, based on the information that you have provided to us, is that certainly you have a serious disability and the present law will in fact compensate you.

Mr Keith Harris: I don't have any belief that will ever happen.

Mr Mancini: The thing that I find a little bit difficult to understand, particularly from the government members, is when they continue to say to people like yourself, who have suffered injuries, "The tort system isn't any good, it's a crap shoot and it's rolling the dice," because when they were running for office, the office which they now hold and asked for and won by telling people many of these things, they promised people government-owned insurance with full rights to tort. They didn't say anything about rolling dice and gambling and a crap shoot at that time; they wanted everybody to be able to sue for what they were entitled to.

Mr Harnick: Read what Bob Rae used to say: "Highway robbery."

Mr Mancini: However, that was then and this is now, so we have to put up with all these inconsistencies. I maintain that the Ontario motorist protection plan, with its faults, should be given an opportunity to in fact stand the test of time. I believe it has stood the test of time. I think we need more time to see how the system will play out for the people of this province. I believe that probably some changes should be made to the OMPP in the near future or in the medium future. I don't know why the entire system has to be turned upside down simply because the government has changed, and I don't know why we have to be the only jurisdiction in North America where people lose the right to sue for economic loss. That's the last question I wanted to ask you: whether or not you've had the opportunity to sue for economic loss.

Mr Keith Harris: I haven't had the opportunity to sue for anything.

The Chair: I'd like to thank you, sir, for coming before this committee.


The Chair: If you want a glass of water, get yourself a glass of water. We're going to take that away because we want to see you. Every time the camera's going down there we're seeing you through the jug.

The next group is from the head injury team of St Michael's Hospital. The two ladies sitting in front of me, would you mind identifying yourselves for the purposes of Hansard and for the people of Ontario to know who you are. I'd like to welcome you to the standing committee on finance and economic affairs. We have 20 minutes; it should be a half-hour. The time seems to be wrong here. It only showed 20 minutes. That's what confused me. So the Chair says you've got a half-hour, okay? You may begin.

Ms Sheila MacDonald: I'm Sheila MacDonald. I'm a speech-language pathologist on the head injury team at St Michael's Hospital. My colleague here is Irene Sullivan. Irene came down with laryngitis, so I'll be doing the speaking in the first part and she'll save her voice for some questions at the end.

On behalf of the head injury team of St Michael's Hospital, I'd like to thank you for the opportunity to present our concerns on some of the implications of the Insurance Statute Law Amendment Act. These concerns relate primarily to individuals with brain injuries.

As you know, insurance benefits can only be effective if the individuals who are entitled to them receive them in a timely manner. Tonight we'll present to you what is actually happening to individuals when they attempt to access the benefits that they are entitled to.


First I'll give you some background on the head injury team. The head injury team of St Michael's Hospital provides multidisciplinary acute care, rehabilitation, referral to community services and follow-up to approximately 220 to 250 people with traumatic brain injury each year. Between 1986 and 1991 we have seen 1,288 people with traumatic brain injury.

In addition, we follow these people at six months, one year and two years post-injury, so we have good opportunity to find out exactly how they access their insurance and what the effectiveness of that was. Many of the individuals we see have been injured in accidents and qualify for no-fault insurance or workers' compensation benefits. Our comments to follow are based on the inpatient and outpatient experiences of these people.

Generally, our team has found that individuals are better served by the current no-fault insurance system under the OMPP. Previously, when individuals had a maximum of $25,000 for rehabilitation, they were often placed in a position of having to wait until their court cases were settled before they could proceed with future rehabilitation. In fact their lives were on hold during this time. Under the current OMPP system we have found an improved access to case management and rehabilitation in a much more timely manner.

The proposed system certainly is an improvement, particularly for students and for those who were non-earners prior to their injuries. Children are still not addressed very well, we feel, but it is encouraging to see a proposal for eliminating the lifetime cap on attendant care. Obviously one who is serious enough to need attendant care will likely need it for the rest of his or her life.

Now I'll move on to our primary concerns tonight, and our concerns are based on the individual's ability to access the insurance funds. As you know, insurance benefits are only effective if they're accessed appropriately and this requires accurate assessment.

Our first point tonight is that assessment of brain-injured individuals by the insurer's representative may not be in the person's best interests. The first reason for that is that an assessor who represents the insurance company is not impartial. Furthermore, individuals with traumatic brain injuries frequently have lack of insight and, as such, they are unable to recognize the full impact of their injuries. Therefore, such a patient's point of view, in an interview as an insurer's representative comes, will probably not represent him well and in fact will be inaccurate.

Usually the health care professionals in the hospitals have spent hours evaluating the patient's status, using standardized tests and 24-hour observation. An assessor should seek the advice of these individuals in developing the rehabilitation plan, rather than just relying on a quick interview with the person or their own assessor.

Our second point is that frequently we have had representatives of the insurer entering the hospital and questioning the patient's family and hospital staff regarding the patient's status. When the patient is not cognitively competent to understand and appreciate the consequences of such an interview, we believe this is a violation of the patient's rights.

The next point is with regard to confusion. If an insurer's representative enters the hospital and begins to ask questions of the person and then presents his or her own predictions and recommendations, and if those predictions or recommendations contradict those of the rehabilitation team and medical staff involved, this becomes very confusing to the patient and family.

The next point is that such assessments by the insurer's representative are a costly duplication of service. When an individual is being thoroughly assessed by a professional team, paid for through OHIP dollars, there is no need to have that person reassessed by the insurer's representative. This can be not only frustrating for the patient but costly for the insurance company, and then the consumers, who are us, end up paying the extra amount.

The solution we propose to this is quite simple. We can appreciate the insurer's need to have information early in the post-injury phase, and therefore our team solution has been to write a letter to the insurer with a summary of all of our assessment findings. This then acts as a prescription for the patient's rehabilitation. That letter is on the last page for your reference. This has streamlined the referral very well for us and has helped people to get their insurance benefits in a more timely manner.

Our second point is unreasonable delays in accessing insurance. We have had many situations in which the insurers have not acted promptly on our recommendations despite the fact that we have sent the rehabilitation prescription letter mentioned earlier. Due to the nature of the cognitive and communication deficits of these people, it is very difficult for them to lobby on their own behalf. What we tend to recommend to them is that they get a lawyer to assist them with the process of accessing the insurance. We think this necessity then negates one of the purposes of the statutory benefits plan, which is to reduce the administrative and legal costs ultimately and have the funds transferred to the individual involved.

Our third point is with regard to change of case management or rehabilitation services in midcourse. In some cases, the patient we are following in clinic will have been seeing a particular specialist whom we recommended for approximately six months only to have his or her case management changed in midcourse because the insurer decides it would like to use someone it has recommended.

Such situations are compounded when the case management or rehabilitation firm that the insurer hires is unfamiliar with head injury. At least 20 to 30 times a year, one of our team members receives a phone call from a firm or agency which alleges to be providing service to one of our patients but is unfamiliar with brain injury. In fact, we've had some of these people who were being paid for their services calling to ask us how to work with the person. While we're happy to be a resource, we think that this is not a good way to provide service to individuals and that there should be some standards put in place to prevent insurers from being able to change the course of rehabilitation on a financial basis when we have made recommendations objectively in the patient's best interests.

Our fourth point has to do with objective multidisciplinary assessment. We are concerned that individuals should be assessed initially and during follow-up by an objective multidisciplinary team. The reasons for this are that, first, it will ensure fair estimates of their rehabilitation and vocational needs and, second, it will ensure that subtle deficits are detected and that the subtle difficulties that occur as a result of diffuse brain damage will be picked up.

For example, a physiotherapist would be more likely to detect subtle physical deficits such as high-level balance problems or difficulties with fatigue in standing in one position over time. That person is going to be more likely than a neuropsychologist or a physician to determine.

We have to have many disciplines looking at the patient to have a fair estimate of his abilities. The multidisciplinary assessment team should include the following: a social worker, an occupational therapist, a speech-language pathologist, a physiotherapist, a neuropsychologist, a psychometrist and a physician.

The third reason why we propose multidisciplinary assessment is to reduce costs by ensuring that the person has the most appropriate rehabilitation plan and can get on with it early in the rehabilitation phase.

Finally, we feel that multidisciplinary assessment will reduce problems proactively rather than after failures and complications arise. It can be quite a mess if the person has to experience job failure and difficulties with his family before he can get on with the business of rehabilitation.

Frequently, we find that the needs of individuals with head injury are overlooked by insurers, physicians and employers who are unfamiliar with the subtle difficulties of traumatic brain injury. Again, this is why we recommend a comprehensive, multidisciplinary assessment at the outset, as the person is leaving the hospital and entering the community.

Our fifth point has to do with the standards and knowledge base of the professionals who assess and treat individuals with traumatic brain injury. Presently, in the draft regulations of January 1993, part VIII, rehabilitation benefits, it's indicated that insurers will accept authorization for assessment and treatment services from a medical doctor, a registered psychologist or a chiropractor. In the case of brain injury, we feel that this process of authorizing and referring patients for rehabilitation services would limit the total picture of the patient's rehabilitation, vocational and academic needs.

Furthermore, it would cause unnecessary time delays. With this process, the patient would have to wait for services while a member of the regulated health professions such as an occupational therapist, physiotherapist or speech-language pathologist would have to go and lobby the doctors or psychologists to cosign their recommendations. This is an unnecessary time delay.


In present practice, these professionals regularly make rehabilitation recommendations independently. For example, occupational therapists prescribe wheelchairs without needing the assistance of a physician or a psychologist. Similarly, speech-language pathologists prescribe communication aids without the involvement of a doctor or a psychologist. A social worker's recommendation that a person requires ongoing counselling should be followed immediately, despite the fact that such professionals are not doctors or psychologists.

The other drawback in accepting information from only these three sources is that despite the fact that a person may be a doctor or a psychologist, he or she may not have adequate information about the cognitive, communication, emotional or functional effects of a head injury. Therefore, the criteria should be related to the professionals' knowledge of brain injury and not simply his or her title.

Our solution that we propose for this final point is that there be objective multidisciplinary assessments, and they should be conducted in order to design fair, comprehensive and effective rehabilitation programs for those who have traumatic brain injuries. It would be possible for clinics in regional trauma centres such as St Michael's to have multidisciplinary follow-up head injury clinics and they could provide assessment and recommendation for the insurers to follow. Such regional centres could assist insurance firms in developing preferred provider lists to ensure that quality of service is maintained.

With regard to who should prescribe or authorize rehabilitation services, it is recommended that the draft regulations be amended to ensure that regulated health professionals as well as physicians and psychologists can do so, and we recommend that standards be set by each profession to indicate the type of training that would qualify one of their members to work with someone with a traumatic brain injury within his or her area of expertise. For example, an ophthalmologist should not comment on one's need for cognitive retraining any more than a speech-language pathologist should comment on one's need for cataract surgery.

Insurance firms should have a network of professionals whom they can consult regarding rehabilitation plans for individuals. Such professionals should have demonstrated expertise in the area and should be recommended by their professional associations.

In closing, we would like to add that there are many opportunities in which insurers and rehabilitation professionals can learn from each other. Our head injury team would be pleased to be a resource to insurers, either in the area of providing education to insurance workers or providing assistance in developing standards and procedures that are more fair for brain-injured clients.

Remember that fair access to the comprehensive insurance benefits to which brain-injured individuals are entitled can only be achieved if there is fair assessment and referral to appropriate and effective services. Thank you.

Mr Owens: The Regulated Health Professions Act seems to follow me around. I want to say that in terms of your concerns with respect to delegating the responsibilities down through to other practitioners, we'll take that recommendation back to the minister. I certainly hope, in terms of offering your services, that we can be included in that offer and, as we have consulted with you in the past, that we can continue to consult with you.

As you're aware, we've set up a task force to look at standards of care to essentially address the issue of the $3,000 cap with respect to attendant care. I guess my question to you is, how would you like to see the standards of care developed around the treatment of a person who sustains a cognitive injury as a result of an accident?

Ms Sheila MacDonald: That's easy. There are already some in place in some of the colleges, and some of our Ontario associations borrow from the American standards already. Each profession should set up its own within its college. It should be something that consumers demand of the colleges, the College of Audiologists and Speech-Language Pathologists of Ontario, the College of Psychologists of Ontario, the College of Physicians and Surgeons etc. I think those colleges could write those standards without any expense to taxpayers.

Mr Owens: I guess the one thing around this certification, I guess is the word I'm looking for, for persons who would be capable of rendering an opinion with respect to a head-injured individual: How do you see that happening without having to go through the 12-year wrangle and transcending three governments, three political parties? How do you see that happening in a relatively expeditious period of time?

Ms Sheila MacDonald: I'm presently designing a course that I hope to offer at the University of Toronto for speech-language pathologists, so I'm being proactive in this and I would hope that other professions would do the same.

Ms Irene Sullivan: Psychology is moving towards specialty designation as well.

Ms Sheila MacDonald: Yes, so we would just require in our associations that you have to have a certificate in this area before you can comment on it.

Mr Mancini: I don't really have any questions other than to say that I find your brief to be highly professional, most interesting and I believe that the things you've recommended make good sense.

I'm hoping that whatever this committee is that the parliamentary assistant keeps referring to -- I should let you know that every group that comes in that has some idea or some problem that doesn't seem to be able to be implemented at the moment is all going to this committee. So you join a long list of people who are going to be considered at whatever this committee is. But certainly I wish to compliment you on the work you've done and on some of the initiatives that you've told the committee you're undertaking.

Having had some experience in working with the head injury associations across Ontario, particularly groups in southwestern Ontario and here in Metropolitan Toronto, I know the work they do is not only very needed; it's not well understood the way -- I just want to re-emphasize the point you made this evening. There are very few people out there who understand the difficulties that head-injured persons face when they try to go back into the community. The more professionals we have who understand this problem, the better we'll be able to educate the entire community and the quicker we'll be able to integrate these people back into their own neighbourhoods.

The Chair: Mr Harnick. We've got three minutes till 9 o'clock. I made a mistake. It wasn't --

Mr Harnick: Can I have as much time as Mr Owens? He had about five minutes. I timed it. I timed it specifically because he got a second question in.

The Chair: You've lost one minute already. Go ahead.

Mr Harnick: Thank you. Let me tell you about a situation that I'm aware of: Young fellow, high school age, end of high school, is involved in an accident. He's an innocent victim and he suffers a severe head injury. What made me think of it was the use of the word "subtle," because when you look at this young fellow, he is the healthiest-looking person you can imagine.

Ms Sheila MacDonald: The walking wounded, we call them.

Mr Harnick: He doesn't even look wounded. He plays tennis, he skis and physically he's in good health. Unfortunately, his brain was injured in an accident in which he was an innocent victim and his ability to learn has been totally lost. He can't retain any information. He was a relatively good student and, based on some of his interests, a future income loss was developed for him based on what he, in all likelihood, would have gone on to do. A future income was based on an income of some $50,000 to $60,000 a year. He received a package that, based on his future loss of income, will make his life a quality life.


Under Bill 164, which fortunately hasn't been implemented for this young fellow, he would have received the equivalent of about $20,000 a year for the rest of his life, which would have put him on the poverty line, because this bill, Bill 164, says you can't claim for your economic loss beyond what we're prepared to give you, and we're prepared to give you $391 a week and that's indexed so that you'll keep up with the poverty line. That's basically what it says. Under the OMPP and under the system previous to that, he claimed his full income loss.

How important is it for this innocent victim, who suffered subtle head injury, or even a not-so-subtle head injury, to have access to his actual income loss in terms of the quality of his future life?

Ms Irene Sullivan: I think one of the areas that the new proposal falls down in is with children and adolescents who have no work experience or limited work experience. We cannot speak totally to their potential; we make estimates about what their potential would have been. I think for children and adolescents and people in school this act falls very far below helping them and they still should retain the right to sue for income.

There should be estimation based on -- for example, sometimes we have the luxury of having school reports to know how they're performing prior to their injury. With estimations post-injury I've seen people whose -- for example, a case where an IQ was 150 following a head injury. Of course, the lawyer and the insurance company said he's still above most of the people. However, as we had the luxury of having the results prior, he'd been tested in school just by chance. His IQ was around 185. So his potential was any kind of job he wanted, really, and now he has severe behavioural problems and basically he'll never work. He's inappropriate.

So I think especially for non-income earners or people who have not earned a wage, the act falls down very badly and really does affect the quality of their rights.

The Chair: Mr --

Mr Harnick: I want a second question, just like Mr Owens had.

The Chair: Mr Harnick, it's exactly the same time. I'll make sure when we go on the road you've got a new watch there, okay? I'd like to --

Mr Harnick: Will you buy me a new watch?

The Chair: You can use this one. It's got no face on it there, no numbers, so --

Mr Harnick: Sort of like the NDP part of the -- no faces on them.

The Chair: I'd like to thank you for appearing before this committee.

Ms Irene Sullivan: Thank you for the opportunity.


The Chair: The next presenter is Steve Ryan. Come forward, please. I like the colour of your tie there, sir. You have 20 minutes. In that 20 minutes if you can leave some time at the end for questions from the committee. Mr Mancini will be the start-off on questions.

Mr Steve Ryan: I submitted my presentation last October and it doesn't seem to be around anywhere so I just have my copy.

The Chair: Okay. We can make other copies for the committee.

Mr Ryan: Okay. But I did send it in to a Mr Decker back in October and then this was postponed.

I'd just like to share with you my experience with no-fault insurance and the OMPP. I've been very successful with it, getting every benefit we're entitled to, but it's still not good enough.

On June 29, 1990, a driver sped through a stop sign in the village of Newcastle, causing a T-type crash. Our daughter and son suffered serious injury. Both were wearing their seatbelts.

Our daughter recovered eight months later from the stomach and leg injuries, while our son remains out of school, brain-damaged from the head injuries he sustained. My wife is a registered nurse and works the midnight shift at the local nursing home. She drives on a limited basis.

On August 11, 1990, I ceased my real estate career to care for our injured teenagers.

In November 1990 we sought legal counsel with our family lawyer. He referred us to a specialist in personal injury litigation. He proceeded with litigation on behalf of our son.

In early 1991 I wrote to Mr Peter Kormos and Mr Robert Runciman of the Ontario Legislature. Both responded with letters of support. Mr Runciman's letter was very specific as to the harshness and the unfairness of the existing legislation.

After taking our son to many local doctors without any improvement, he was referred to the whiplash and headache clinic at Sunnybrook hospital. The expert examinations, physical and psychiatric treatment brought about improvements for which we are grateful.

In August 1991 I found an evening and night security guard's job with continental hours. This allowed me to work, leaving the daytime open for our son's numerous medical appointments. I was laid off January 10, 1992. It's just as well, as I was exhausted by this time.

Financial lack was taking its toll, as all savings, RRSPs etc were now exhausted. I wrote to my insurance company explaining our financial plight. I also wrote to Premier Rae and Mr Brian Charlton.

My insurance company granted me a $100 per week allowance in February 1992 and advised me to collect UIC benefits. I refused to collect UIC.

Replies came from Premier Rae and Mr Charlton. Mr Charlton's letter alluded to care giver benefits. He recommended I contact the Ontario Insurance Commission to seek assistance as to eligibility. The pre-recorded tapes and advice from the counsellor equipped me to claim care giver benefits.

At this time, a litigation specialist with my insurance company called, advising that she was now handling our file. She sent an investigator and a neurorehabilitation team to our home to assess our son and our family needs. Shortly thereafter, she granted me full gross income care giver benefits based on my 1992 security guard's wages. Subsequent to this, she paid me retroactive to August 1, 1990.

The year 1992 introduced us to the consultant doctor for independent medicals. A neuropsychologist, neurologist and neurosurgeon examined and interviewed our son in May, June and September 1992 respectively.

After six hours of interview and psychological testing, the neuropsychologist wrote in his report that our son does not have a closed head injury and does not suffer post-traumatic stress disorder. He also wrote that our son has many psychiatric problems, none of which are related to the accident. He finally stated I should be removed as our son's supervisor. I was offended and humiliated by his report. A letter of protest to the CEO of my insurance company was mailed by me.

The litigation specialist hired the neurorehabilitation team who assessed us at our home. At present, two therapists are working with our son on his cognitive and language deficiencies. He continues his Wednesday psychiatric group therapy in Oakville. He's learning pain management and healing of memories caused by the post-traumatic stress disorder.

From the time of the accident until he participated in learning pain management, he had been on five different drugs. Today, the only chemical interventions used are Imetrix injections when a severe headache comes on. He describes these headaches as feeling as though his brain is floating and a nail is being driven into it.

Our son is improving emotionally and psychiatrically. We realize he will never be 100%, due to the brain damage. On September 23, 1992, he passed the Hugh MacMillan Rehabilitation Centre's program, which will allow him to obtain his driver's licence. At this time, I will remove myself as his care giver.

Our son got his driver's licence December 16, temporarily until March 3 when he's being reassessed, so that very day, December 16, I called my insurance company and asked them to terminate me as his care giver, as we do not, my wife and I, want to hinder his recovery in any way.

Of course, this puts me out of income and out of a job, but I do realize I can claim benefits under the OMPP if I am mentally or psychologically injured. I'm stressed out beyond belief, but at this point I'm not prepared to make a claim in that regard. I want a job.

The OMPP does not provide any funding or reintegration programs for people like me. I mean, I was cut off just like that, and the insurance company had every right to do it.

In regard to the threshold, it is my understanding the first case has gone to trial and the judge has ruled that only "near catastrophic" injuries will qualify.

Mr Charlton's plans to reform the OMPP have my full support. Lifetime medical is a must. Lost future income is covered by a loss of earning capacity benefit indexed for inflation. His program provides the best of guaranteed benefits combined with access to the courts for pain, suffering and psychological damage, subject to a $15,000 deductible.

Finally, I have joined the Durham Region Head Injury Association. The monthly meetings and seminars are helping me to understand what our son and other family members are going through.


In summary, my recommendations to the committee are: -- Insurance companies must provide to accident victims and their families all pertinent information related to guaranteed benefits. I didn't know about booklet OPF number 1, which covers all the guaranteed benefits, until 20 months after the accident.

-- All insurance companies should be compelled to make periodic home visits to victims to assess needs and answer questions. Phone contact alone is inadequate.

-- Only doctors who treat as well as examine patients should be allowed to do do independent medicals.

-- Patients should be allowed to tape-record independent medical examinations to provide a record of the doctor's examination practices, questions and answers.

-- Parents like myself should have income and programs available to allow us to reintegrate into the workforce. We need to be restored to a pre-accident basis.

-- The Ontario Insurance Commission should be promoted with regard to its services to the motoring public. They were of great assistance to me.

-- The head injury associations should also be promoted in greater detail, as many accident victims suffer head and neck injuries.

This has been my experience since June 29, 1990. The OMPP has many fine points. It needs reform. Consultant doctors who provide offensive and demeaning reports should be put on alert that their practices will not be tolerated. May God grant this committee the wisdom of Solomon as it makes its decisions.

Mr Mancini: First of all, Mr Ryan, I want to say that the story you've told the committee is one that I'm sure makes us all want to express our personal sympathy to you and your family. I'm somewhat confused as to exactly how you would like to reform the OMPP. Did I understand you correctly when you said you would prefer immediate benefits instead of the right to sue, or did I understand you to say that you would prefer the right to sue as well as immediate benefits that you weren't aware of? I lost you for a second.

Mr Ryan: I've been watching these proceedings for three days, and I must admit I have some doubts about Bill 164 that I didn't have three days ago. It's my perception that the insurance companies have no intention of paying a dime for additional compensation over and above guaranteed benefits. They're going to fight me. They're fighting me like crazy now. Our son had five independent medicals last year: three from my insurance company and two for the defence. They are fighting me.

Mr Mancini: That was going to be my next question.

Mr Ryan: So I may lose, even though my son is brain-damaged. He's not crippled. He's not paralysed. He's not slurring at the mouth.

Mr Harnick: It's subtle.

Mr Ryan: Yes, and I picked up your comment to the previous person. So I'm trading off a guarantee.

Mr Mancini: So what you're saying is that you may lose the court case. Is that what you're saying?

Mr Ryan: There's no guarantee we're going to win.

Mr Mancini: So you would prefer not to have that kind of system?

Mr Ryan: It's rolling the dice, and I'm not a gambling person. If my son were injured under Bill 164, I know he would get a cash settlement, probably up to the limit. There wouldn't be any question in my mind.

Mr Mancini: He'd get a settlement less $15,000. But he'd have to prove -- that's where I seem to lose you.

Mr Ryan: I'm torn myself.

Mr Mancini: That's where I lose you, because under Bill 164, in order to get anything over and above whatever the benefits are going to be, you have to apply for action, and then there's a $15,000 deductible.

Mr Ryan: But he may get nothing. In the existing OMPP, does he have a permanent serious disability of a physical nature?

The Chair: As I go along, Mr Peter Kormos has joined us, and we go to Mr Harnick.

Mr Harnick: You just hit it right on. The drawback to the OMPP is whether his injury is permanently serious and whether it's physical in nature. We all know that under the Liberal scheme, psychiatric injuries were excluded. Physical injuries were included if they were permanent and serious, but psychiatric injuries were excluded. You may get nothing, but that has nothing to do with a crap-shoot in terms of liability. You're the innocent victim, is that correct?

Mr Ryan: Yes.

Mr Harnick: So that's the weakness of that OMPP scheme. Even though you have a demonstrable injury, you might get nothing because the Liberal government excluded psychiatric injuries, so that's a big defect, right? You have to say yes or no.

Mr Ryan: We are not suing for psychiatric; we are suing for physical.

Mr Harnick: Because if it was psychiatric -- what you're trying to do is prove that it's physically based.

Mr Ryan: Yes.

Mr Harnick: Exactly. A brain injury is a physical injury. It has other manifestations, though. That's what we have to do, unfortunately, with the Liberal legislation; we have to be imaginative.

But let me tell you something about Bill 164. Your son has a serious head injury. He's also got psychiatric problems. How do you like the idea that if he can't work to the potential he had before the accident, all he gets are the prescribed benefits?

Mr Ryan: Of $185 a week.

Mr Harnick: That's right, and then eventually it'll turn into $20,000 a year, but he might have been able to make $40,000 or $50,000 a year, right?

Mr Ryan: I'm taking the worst scenario. For every five reports they have, we have 15. We're going to win this thing, but --

Mr Harnick: I hope you do, but let me ask you this. Under the NDP scheme, Bill 164, the most your son would get when he got to 30 years old was the equivalent of $20,000 a year, for his income, if he couldn't work.

Mr Ryan: I thought it was $30,000.

Mr Harnick: It's $20,000, the average wage.

Mr Ryan: I was told it was $30,000.

Mr Harnick: Yesterday Mr Endicott was here and he said it was $20,000 net. Do you think your son could have made more than that in his career if he hadn't had the accident?

Mr Ryan: Well, he went through two years of high school with a 72% average.

Mr Harnick: And don't you think he should be entitled to claim what his actual loss would be?

Mr Ryan: But as a father with limited money, I have no money to fight these guys. With Bill 164, it's guaranteed.

Mr Harnick: No, it isn't.

Mr Ryan: Yes, it is.

Mr Harnick: No, it isn't.

Mr Ryan: It is.

Mr Harnick: Let me tell you about Bill 164. The income loss, which is the largest part of his claim, might be $20,000, $30,000, $40,000 or $50,000 a year for the rest of his working life, and all he's going to get is $20,000, because they've taken away the right to claim the additional economic loss.

Mr Ryan: The OMPP could leave him with $185 a week.

Mr Harnick: That's right. The OMPP is no good either.

Mr Peter Kormos (Welland-Thorold): On a point of order, Mr Chair.

Mr Owens: He's not a member of this committee.

Mr Harnick: He is so.

Mr Kormos: A point of order, Chair. The standing orders entitle me to raise points of order.

The Chair: What's your point of order, Mr Kormos?

Mr Kormos: The point of order is that that's exactly why New Democrats have always fought for good no-fault, so that people could live --

The Chair: I'm sorry, it's not a point of order. Shut the mike off.

Mr Kormos: Wait a minute. You didn't let me finish my point of order.

The Chair: It's not a point of order. It's a piece of information. I go to Mr Owens.

Mr Kormos: The Premier hasn't even passed his laws yet, Chair, and you're already gagging a member of the Legislative Assembly. Good style.

Mr Owens: My question to you is quite simple. In your view, as a parent, what's more important to you --

Mr Ryan: Security, sleep at night.

Mr Owens: What's more important for you? Is it more important to you to spend years and years in court and potentially end up with nothing or to have immediate benefits, immediate access to rehabilitation? Is that more important to you?

Mr Ryan: I have given this careful, careful consideration. I believe my son would receive less under Bill 164. I know that. But I'll tell you, the accident was two and a half years ago, and our son is improving wonderfully, because he's had the access through my fighting for him with the insurance company. I have a good insurance company: You hear all these horror stories of people getting cut off; we've never been cut off. They have provided and paid for everything I have asked for that's in the insurance contract, but they won't tell me what I'm entitled to. I have to really root around to find out what I'm entitled to.

In the head injury association, I see victims injured four years ago with no medical treatment like my son is receiving. So the no-fault guaranteed benefits -- no-fault is the answer in principle.

Mr Owens: I appreciate your answer. Mr Manicini offers you sympathy, but are you aware of what his government gave the insurance companies?

Mr Ryan: Yes, $750 million a year, my money.

Mr Kormos: And you propose to give them even more.

Mr Owens: Were you here for the presentation from St Michael's Hospital?

Mr Ryan: Yes.

Mr Owens: You've mentioned something about the kinds of consultations that took place around your son in determining the nature and extent of his injury. Do you agree that it's in the best interests of people like your son and other accident victims that we look to establishing appropriate standards of care, to have an individual's own physician being involved at the outset in the assessment?

Mr Ryan: We have that now. Nothing happens without the psychiatrists in Oakville coordinating, because the insurance companies pay only if the treating physician makes the proposal, the need. The biggest problem with the insurance company doctors is that they're dinosaurs. They do not have the knowledge or the experience of the physicians who are treating our son from Sunnybrook and the whiplash and headache clinic. They report the most outrageous comments and conclusions after one visit. Every one of them, all five of them -- or four out of the five, pardon me. The four consultant doctors left me out in the waiting room every time; they wouldn't invite me in. With the last one I forced my way in. He still wouldn't let me come in.

The Chair: Mr Ryan, I have to say our time is up; it's 9:20. I'd like to thank you for coming before this committee today.



The Chair: The next presenter is Sal Valela. Welcome to the standing committee of finance and economics. We have 20 minutes, until 9:40. You may begin. Leave some time at the end for some questions too, please.

Mr Sal Valela: I'd like to say good evening to everybody tonight. I love you, Bruna and Vanessa and Robert.

My problem started back in August, when I was involved in a motor vehicle accident. Someone hit me from behind. It wasn't as catastrophic as some of these people I've been listening to, who've been given the runaround and all these other things, but it's hurting me enough.

Another thing that this new Road Ahead report doesn't cover is people who have already incurred a disability. There's nothing mentioned about people who are already on disability, either partial or permanent, whatever the story may be.

No-fault: Both the OMPP and this new one have their goods and their bads: The capping is taken off; no index. I don't agree with the 90%, because when I'm involved in an accident and it's not my fault, I believe I'm entitled to what I'm entitled to. I don't believe I should be getting paid over and above the amount of money I've been making as an employee; I should be making the same money I would be making as an employee. That's fair in my eyes, and in the eyes of Solomon, of course.

I don't like the things about the children, the spouse -- the death plans. They're going to be increased, but for me that's not high enough, because Robert and Vanessa -- I've come to learn, as other people have been teaching me, that you can't put a price on a child's death. But let me tell you, you can put in something to make you happy as an individual, something to make you feel there's something there to care for: You go to the cemetery and bring them flowers or whatever you do, and the thoughts will always be there. The insurance companies are trying to wonder, "How is this going to impact my insurance company in the next 40 years?" It seems I've been going a little off the topic here and there.

Mr Mancini: You're right on.

Mr Valela: Starting with Mrs Fernandez, the lady who came to take the report at my residence after the date of the accident, she was good. She came, she took the report and everything, but I made a mistake on the report and I asked her to send me another one. We had some difficulties: I had to go up and get it. I asked her to mail it. I asked her to send it by courier. They won't send things by courier, which I disagree with, because the way I've organized my life is that I do the minimal running around. I let everything else be mailed to me, even my bank statements or the direct mail deposit I took advantage of back in 1979 or 1980, when I was employed by -- well, I am employed by Canadian National Railway. I don't suspect I should be running around to go get my cheques, and all these other behaviours. I just don't like all this running around: I have to run around for Sun Life, for doctors' reports, my reports, for all kinds of different things.

They said about this new family act thing they're talking about that you lose the first $5,000, or a $15,000 deductible. I disagree with that 100%. None of this deductible here, it's just too touching to the heart. I can show you my skis, my fishing rod and my boots and all the fishing equipment that I'm going to try to show my children that there's more to life than running around, that you could spend your time on a hill, you can spend your time out on a boat, fishing, playing chess, doing things. Vanessa, in return right now -- she's almost three years old -- out of the blue, she'll come up to me and she'll say, "Daddy, my back hurts me," because that's what I say to her. She says, "I want to play horsy. I want to do things," and there are limited things that I can do. I feel pain in my leg.

I believe that the OMPP is a good one, but it can be modified also. So can the new one; it can be modified. The insurance companies are making millions of dollars. They've got houses in Switzerland, Mercedes Benzes, caviar in their cars. Of course, they're working 24 hours of the clock, because their company is striving to make money. But listen, I'm an individual too. I don't want to be behind. I want to be fair, fair to me. I'm losing out on my RRSPs.

Interjection: Why?

Mr Valela: Because my contributions are as high as what they would have been if I was working. But the plan of the RRSP is the same as their request: How is it going to impact me in 25 years? If my contribution is $3,000 this year, 25 years from now that contribution will grow and be substantially higher for me, for Sal Valela and his family.

The insurance company is using the adjusters to relay improper information. I'm phoning the Ontario Insurance Commission, and Mrs Paquette is the lady. Thank God that I've run into this lady, because she's helped me out. I would have banged my head against the wall, because it just seems like the insurance company's allowed to tell the insurance adjuster to inform information to me, like I'm not allowed to get the 80% of my premiums, I'm only entitled to either 79% or they're going to cut me off because of this, this, this and that, when the plan states that you get 80% of your gross pay tax-free. They even disputed that. I had to take out one of their flyers to show them that on the thing it states tax-free. I've got just so many papers. You talk about baggage. I've got my suitcase of baggage.

I really want to get back on to the point of disabled. This act does not show anything, or the previous act, to the people who are incurring a disability, and it hurts, because when I returned back to work in February, not only did I have to hold the pain of the automobile accident but also the pain that I have occurring in my right shoulder: bursitis, tendonitis, rotator's cuff. It's not an easy pain to live with.

I try to manage, I try to get above a lot of the cycle of things by just thinking of the future and moving on. I try to do a lot of things. I want to get better. I don't want to stay idle. I want to be active with my children. I'm missing Robert and Vanessa. I'm missing that thing of putting on the binders and the boots and going down the hill with them and appreciating it, even if it's just here on Bathurst and Sheppard on that little hill. Just to be active, to get back. It's not that I'm not trying. I'm trying my best.

But I don't need a runaround from the insurance companies telling the adjusters and then me phoning the Ontario Insurance Commission to find out what my rights are. As with one of the people in the Ontario Insurance Commission, I put in for my mileage. I still haven't got paid for my mileage. This is 1991. I was going to the doctors, physiotherapy, going back home and to the bank. These people were talking about that.

I took advantage of the system, when the system said that the Canadian National Railways put direct mail deposit. For me, that was beautiful. That was perfect. I never had to go to the bank, worry about my money. The money was always there. Now, when the cheques come to me, I have to take the extra mileage to go to the bank and deposit my money.

I didn't have to do these things before. I had my system. I had my way of living and standard geared in the best and suitable way to make my life better financially and get my financial statements and credits with standing above triple A. I believe you shouldn't abuse or you shouldn't take advantage of the system and you should pay your rates and you should do what you can do and do it properly. That's basically all I have to say.


The Chair: Sal, there was one thing. You never mentioned the accident. Was this a car accident or a motorcycle accident?

Mr Valela: It's a car. I was involved --

Mr Harnick: Rear-end collision.

The Chair: Rear-end collision, okay.

Mr Valela: A rear-end collision in a truck, where I was rear-ended. This is another thing. The TTC driver presented me with an invalid insurance licence. So I took it away from him and he never had one until the police came. After the police came and the other TTC insurance driver came, he presented the police officer with a valid insurance company. All this time that TTC driver was saying to me, "Give me back my insurance card," and I said to him, "No way, this is invalid, a month and a half invalid."

He was never tried for careless driving, driving too close, nothing at all. I even complained to the Ontario Insurance Commission. I've got my briefs here, if you're willing to photocopy them and go back into the briefs. It was what you might consider a minor accident. To who? To other people but not to me.

You've got to look at the individual I am. I'm already disabled. I'm trying to do a job and when I went back to work at Canadian National Railways, you know, they discriminated against me in saying that, "We're going to cancel your job as a painter because the diesel shop and the car shop don't really need a painter any more." In turn they were crying and complaining to the department I work out of that they did want a painter, that they did want someone to get in there and start painting all the safety lines, the safety rails, the walls that are full of grease and grime, paint them white. I was discriminated and I had to fight through my union.

That's another thing -- Sun Life. I pay benefits for Sun Life. I shouldn't see why the insurance company should be getting away free. If I pay a little bit, they should be paying too, the insurance companies, like in better driving programs. I agree with a lot of these other people who were up here saying, "There should be better driving programs," no matter if you're 60 years old or 45 years old.

There should be a 24-hour RIDE program. You shouldn't be drinking and driving. You shouldn't be under some kind of medication that impairs you, even out of an automobile accident, that you take some of these pills. But then I'm the only one who really has the responsibility to take care of my family because Bruna was pregnant during the time. Vanessa was small. Robert in the beginning had a meconium of the lungs and, thank God, he recovered from that and right now he's a 22-pound baby, 26 inches, 27 inches. He's a large kid, and I have a hard time holding him up. I was having a hard time going to work, managing my painter's job with a disability in my shoulder, plus doing what I was able to do with the modified duties that Doctor Ocana gave me to try to handle the job with my disabilities.

How come one insurance company sends me to a doctor and says that I'm all right and when I go to the other doctors they say to me that I have a problem, a muscular problem, an acute muscular problem, back strain? I can't understand that.

I'm a simple man. I'm a simple person. I want to lead on with my life. I want to be able to go skiing. I want to give Robert the chance, instead of just sending him out and giving him private lessons. I want to be there with him. I want to be there with both of my children. I want to be able to roll around in the snow and I'm doing that now with the pain and making my pain even worse, because I'll never gain that time, that time that you lose -- three, two, one, four, five years old -- with my children. You'll never regain it.

You are telling us that if you abuse a child, if you traumatize a child, the child will live with those scars. Well, how about us, 40, 50 years old? It doesn't stop there. The clock doesn't stop. The clock keeps on going all the time. Individuals, no matter if you're male, female, black, white, Croatian, it doesn't matter who you are. The clock keeps on going. I've got to try to make my life better with the injuries but I have to live with the pain.

An insurance company, a Mr Ross -- over the holiday season I drove underneath the bridge. There was a company working there. They didn't have the bridge all tunnelled up and I got glass, chips and sand on my windows and now my windows are all scratched. The guy came in and he said to me it was my fault that I had chipped the windows. The insurance guy who came in said it was my fault that I chipped the windows.

Then after that, I went to go buy some groceries to have a little turkey to make my life better, bring the family over, get together at the house and feel better. I got my car. My car was smashed. Somebody hit my door. The guy came out and he goes, I hit the curb. This guy said to me that I hit the curb. These people from the insurance company, the adjusters, you just might as well say: "Hey, wait a minute. We don't need to pay you, Mr Valela. Thank you very much for your annual premium and you can go home now."


Mr Valela: I'm not saying NDP, PC or whatever. What I'm trying to say is that we've got to modify this plan. We've got to make it better for everybody and especially for our children, especially the people from St Michael's Hospital who have been up here who talked about doctors who make independent assessments. I will not let another adjuster in my house. Take note of that: never, never, Mrs Agresti or Fernandez. I will never let another insurance person in my house. I let Mr Jeff Taylor in because I was reaching the point that the only person who was helping me was Mrs Paquette from the Ontario Insurance Commission. I don't know what to say, but thank God for her; and my doctor, Dr Ocana, thank you also.

The Chair: Mr Harnick, we've just about run out of time there. You've got a minute or two.

Mr Harnick: I just want to let you know that under the Liberal scheme, for your injury, unless a court was prepared to say it was permanently serious, serious for ever, you'd get zero. Under the NDP scheme, you would get a certain amount of money because the accident wasn't your fault, a straight rear-end collision, but they'd take $15,000 off.

Mr Valela: How about the threshold?

Mr Harnick: Most back injuries, unless you need some surgery, are worth maybe $15,000 or $20,000 after four or five years. So under the NDP scheme you'd get zero as well.

Now tell me something. You've told us that you're not able to give your daughter a horsy ride. You're not able --

Mr Valela: Oh, I do it but I do under pain.

Mr Harnick: That's right. You do it --

Mr Valela: I do it under pain. I won't let it go by. I won't let these two, three years of my life go by.

Mr Harnick: -- and it's hard for you to hold your son. Tell me, what do you think about insurance schemes that won't compensate you a penny, not a single penny because you've lost enjoyment of your life and your family has lost enjoyment of their life? What do you think of those kinds of schemes?

Mr Valela: I disagree with that, but we could come to an agreement. Forget about Liberals, PCs or NDPs or Jack TNTs or IMBNGs or whatever you want to call the next federal cabinets or caucuses. Let's be open, gentlemen and women to meet and to collaborate and to let the insurance companies make money, but wait a minute. I want to have some caviar too, I want a Mercedes too, I want a house in Switzerland also and I want a jet airplane to take me or my tax-benefit company wherever I'd like to go too. Yes, these people do work 24 hours around the clock. They do deserve to make money but I deserve something too.

Mr Johnson: My question is very short and very to the point and it's kind of general, but it could be kind of specific. Basically, you've said a number of times, "This is a proposal that we're presenting here before this committee." We would like to know from all the people who make presentations what they think of it, and we've got lots of opinions with regard to that. You've said to modify it. I was wondering, do you have any specific areas, any particular thing about the proposal we make that you would like to see changed?

Mr Valela: Are you talking about the accident benefits revised --

Mr Johnson: That for example, yes.

Mr Valela: Under this thing, what I'm reading here is the 90%. No, I should be entitled to the same amount of money I was making -- I was working at the Canadian National Railways -- not a penny more, not a penny less. I should be entitled to contribute to my RRSP. They use the factor, how is this going to impact us under this new plan 30 years from now? Well, how about me and my RRSP 30 years from now? I'm not going to be able to contribute the full amount, so that money won't be working for me; $600 weekly and the old one is not indexed; the new one is indexed.

For people who have businesses and they're working on incomes, like that stuff you have to work out with these groups of people, meet with them open-minded, challenge their points, they challenge your points and go on. Part-time earners I'm not too worried about as of right now, unless I go into a part-time job somehow or another or something. For income earners, you say that this plan's going to cost from $200 million to $500 million. I'd like to know where? If the insurance companies are making --

Mr Kormos: From you.

Mr Valela: Wait a minute. Wait a second. I know it's from me, but what I'm saying is, if the insurance companies are making $700 million, they should be able to lose too. They should pay into the RIDE program.

Mr Kormos: No, that's not how it works.

Mr Valela: Please, excuse me. They should be able to pay into the RIDE program because they want better safety programs, right? We should all pay into it. We should all be able to make better safety programs, everybody, the whole system, because that's what they're after. They're after lowering the premiums, and if you go after that problem head on, you will lower the premiums.

I had one of the worst driving records around. I had to get down on my knees -

The Chair: Excuse me, Sal. Time has run out and I don't think you want the insurance companies to know that you've got a poor driving record.

Mr Valela: No, no, no. I have a good driving record now because I've curbed my standards.

The Chair: Okay, fine. I'd like to thank you for appearing before this committee. I understand you've been watching the procedures for the last couple of days.

Mr Valela: I have.

The Chair: We're glad to have had you with us here.

Mr Valela: I thank you very much for letting me speak and letting me present on my behalf.

The Chair: Okay, fine. Thank you. I guess we'll see the committee at 10 am in Thunder Bay. This committee's adjourned tonight.

The committee adjourned at 2142.