New TBF Bosses Should Tell No-Fault Fans: Close, But No Cigar!
The infamous Islamic jihadist attacks 25 years ago today (certainly not the last barbaric mass murders perpetrated by bloodthirsty Muslim terrorists) killed nearly 3,000 men, women and children in the Eastern United States. The events of 9/11 also had negative repercussions for the insurance industry, triggering depressed investment revenues and markedly increased reinsurance costs. In Canada, auto insurers promptly sought to recoup profit margins dampened in the wake of 9/11 by embarking on a “Blame the Victim” campaign which resulted in the implementation of caps on compensation for innocent victims of reckless drivers in provinces ruled by Conservative governments in 2003 and 2004. Here in Alberta, an attempt by Conservative Finance Minister Patricia Nelson and her unelected bureaucrats to cap compensation for injuries just short of catastrophic was successfully opposed by the Accident Victims/Insurance Policyholders Advocate (AVIPA), leading to the defeat of Nelson's plot in government caucus in October 2003. The deciding vote in caucus was cast by MLA Brent Rathgeber (who later became Chief Operating Officer and VP Legal of the Alberta Insurance Council), who persuasively stated, "I appreciate that the bureaucrats at the Department of Finance have limited interest in an unbiased and objective analysis; however we as politicians MUST insist on objectivity and fairness both in process and result." Thanks to Mr. Rathgeber's courage to speak truth to power, Mrs. Nelson was forced to settle for a minor injury cap on fast-healing sprains, strains and whiplash a year later before doing Albertans the favour of leaving public office for good in November 2004.
Over the 20 years that followed, the insatiable auto insurance lobby was a regular visitor to the offices of Alberta Finance department bureaucrats, always seeking more corporate welfare at the expense of innocent Albertans injured by careless drivers. Perhaps tiring of these incessant visits, in November 2024 then-Finance Minister Nate Horner (now thankfully riding the backbenches) announced plans (ridiculously dubbed "Care-First") to raise auto insurance rates and rip away the rights of Albertans to seek injury compensation from negligent drivers' insurers. After all, if Nanny State Nate's Finance department were to force under penalty of law Alberta motorists to purchase from private, profit-driven corporations no-fault policies that forbid them from filing liabilty claims against at-fault drivers' insurance companies, what more could the avaricious auto insurance industry possibly want?
However, Alberta Finance is under new management now, with a new Finance Minister, new Chief of Staff, new Deputy Minister and new Superintendent of Insurance, all appointed to these posts this year, after Nate's no-fault nonsense (which slashes compensation for innocent victims to increase benefits for reckless drivers) was overwhelmingly rejected by UCP members at the party's AGM late last year. These new bosses (hopefully not the same as the old bosses) have asked victims' rights advocates to help the Finance department carve out (of this odious "Care-First" crap) tort rights for Albertans with motor vehicle accident (MVA) injuries more serious than those currently capped under the Minor Injury Regulation. Last month, both the Alberta Civil Trial Lawyers Association and the Canadian Bar Association submitted proposals to Alberta's Treasury Board and Finance (TBF) department, recommending that if the government is hell-bent on implementing its unjust, unnecessary, unconservative, unAlbertan no-fault scheme next year, it should at least preserve the fundamental tort rights of innocent Albertans permanently injured by reckless drivers. And yes, while technically under the new Permanent Impairment Regulation, that might include someone with a previously damaged tooth that gets permanently chipped in a car crash, such an injury likely would attract a piddly generals award of a few hundred bucks at best (probably less), with zero impact on the average Albertan's premium. Crucially, ACTLA's recommended threshold would also preserve tort rights for a person who, due to the fault of another, fractures their kneecap so badly in a car crash that it has to be surgically removed (see Table 24 in this macabre "meat chart" regulation). Hands up, any of you who think an innocent Albertan who literally gets kneecapped should not have tort recourse against the perpetrator of that gruesome injury. Btdubs, if your hand's up right now, kindly consult the DSM to diagnose your disorder.
ACTLA advises that eliminating the traditional civil legal rights of innocent Alberta auto accident victims with non-permanent injuries (about 90% of claims) would reduce the average Albertan's auto insurance rates by about $200 per year, a figure confirmed by the Insurance Bureau of Canada in the proposal IBC made back when Nate Horner was Finance Minister. Or of course, Alberta motorists could continue to pay that whopping extra $200 per year for auto insurance while filling up their hundred thousand dollar F150s with $200 per week in gas, so as to safeguard the existing tort rights of innocent victims who suffer any injuries in car crashes caused by careless drivers -- but that would make far too much common sense for this integrity-deficient government.
Clearly amongst the stakeholders involved in this issue (injury lawyers, insurance companies, insurance brokers and government), auto accident injury lawyers have come to the table with a cost-savings proposal that will drastically reduce revenues in our industry. If all stakeholder groups (plaintiff counsel, insurers, brokers and -- gasp! -- even the government) get a haircut in this process (as opposed to the outright decapitation of this firm's industry sector that would occur under the so-called "Care-First" no-fault scheme as currently set out), we can preserve tort rights for innocent Albertans with permanent MVA injuries while reducing rates for good Alberta motorists. In proposals wrongfully ignored by the previous TBF administration, IBC and IBAA set out cost saving measures including removing minor injuries (about 80% of claims) from tort (with an option to purchase non-pecs coverage for MIR injuries from your own insurer) and eliminating the insurance premium tax (as economist Jack Mintz has been recommending for over two decades). As this column a year ago in the Edmonton Journal pointed out, eliminating the insurance premium tax and reducing the health-cost recovery levy would lower premiums for policyholders by about $90/yr while barely making a dent in the provincial government's annual revenues haul (which last fiscal year was a gaudy $82.5 billion).
However, and as our firm has said previously, insurers and brokers could use a little off the top as well. Replacing the 6% underwriting profit provision with a 75% auto loss ratio target, and moving Alberta's bloated brokerage commissions ($265 per policy) a smidge closer to the levels of those in Manitoba ($66 per policy) and Saskatchewan ($67 per policy) -- see page 3 of the April 2024 Oliver Wyman report -- would significantly reduce rates for policyholders without revictimizing innocent injured Albertans (mostly women and children) already victimized by at-fault motorists.
Numerous other cost-savings ideas have been proposed to the Alberta government over the years, many of which already have been implemented and many more which could still be implemented. In the latter category, initiatives that would save Alberta motorists premium dollars include scrapping the Direct Compensation Property Damage scheme, allowing optional collision/comprehensive coverage for repairs with basic or after-market parts (ideas submitted to the Honourable Premier and Finance Minister Horner by ACTLA two years ago); making additional "care-first" type benefits an optional add-on to the existing compulsory Section B benefits already available on an immediate, "care-first" basis in Alberta's current, best-in-class tort law auto insurance system (an AVIPA idea cited in this Calgary Herald editorial way back in 2003 -- an editorial likely written by Danielle Smith!); codifying an automatic 25% contributory negligence reduction for seatbelt scofflaws (as per this IBC proposal in 2003), waiving Schedule C costs for claims settled before a Statement of Defence is filed and eliminating prejudgment interest on general damages (also in the 2003 IBC proposal as well as in a joint submission of AVIPA, CBA, ACTLA and F4R that same year); and increasing traffic safety initiatives including incentivizing or mandating the use of winter tires (as per this CBA letter from March of 2020).
In conclusion, if all stakeholders (plaintiff trial lawyers, government, insurers and brokers) are willing to take a little water in their wine, and if the new and improved TBF administration is prepared to pause for sober second thought, good Alberta motorists should be able to benefit next year from auto insurance reforms that reduce rates while preserving the rights of permanently injured victims of careless drivers. So that these reforms roll out at the same time, it is respectfully submitted that July 1 (not January 1), 2027 is a reasonable target implementation date. Notably, while the so-called Care-First legislation had a January 1, 2027 target implementation date when that legislation was passed last year, the law was amended earlier this year to remove that target date. Neither the legislation, nor the regulations (announced less than a month and a half ago in a classic "take out the trash" news item posted on the government website the Friday before August long weekend) mandate a New Year's Day implementation, and so there is no reason whatsoever that the UCP government can't park this putrid plan, no matter how badly the no-fault fans at the AIRB or TBF bureaucrats named David want to ram through this unpopular, socialist-style "Care-First" steer dung on that date. Just as the tail should not wag the dog, elected government officials should not be led by the nose on this file by mid-level bureaucrats with no decision-making capabilities. See the wise advice of experienced former McCourt Law Offices injury lawyer (and ex-Conservative MLA and MP) Brent Rathgeber KC (whose last name literally is German for "advice giver") a generation ago, mentioned in the first paragraph of this post.
And finally, just by way of gentle reminder, the government's favourable response to this post is strongly recommended well in advance of the UCP AGM set for the end of November 2026. Please do NOT rip away tort rights from innocent Albertans permanently injured by reckless drivers. Thanks.
About the author of this blog post: Before earning his law degree from the University of Alberta in 1990, Mark McCourt worked in the Constitutional Law Section of the Alberta Attorney General's Department. His academic articles on Canadian Charter of Rights and Freedoms issues have been published in the Alberta Law Review, Saskatchewan Law Review, Manitoba Law Journal and the Legal Medical Quarterly. He has been practicing injury law for over 35 years, has run his own auto accident injury law firm for over 31 of those years, and in 2004 was named one of Alberta's 50 Most Influential People for his audacious advocacy and exceptional expertise in the field of automobile insurance reform. Last month, McCourt's 17th guest column (since the 2023 Alberta election) on auto insurance reform was published in the Calgary Herald. He has spent much of the summer of '26 writing about the matter and meeting with new TBF bosses to share his expertise on this important issue, advocating for reforms that will preserve tort rights for innocent Alberta auto accident victims with permanent impairment injuries while reducing rates for automobile insurance policyholders with good driving records.