B.C. premier announces ICBC rebate to offset record-breaking gas prices

Posted March 25, 2022 7:27 am.

Last Updated March 25, 2022 10:39 pm.

Drivers in B.C. will receive a one-time $110 ICBC rebate as some relief after weeks of record-breaking gas prices. Commercial drivers will receive $165.

The premier says Vladimir Putin’s illegal war on Ukraine has had chain reactions on the B.C. economy. John Horgan did not announce any changes to April’s carbon tax increase.

British Columbians are told to expect the rebate to be deposited in their accounts in May, or in the mail by cheque in June.

“I appreciate that government can’t … protect consumers from runaway prices, other than using the tools that are at our disposal to reduce costs and in this instance we’re able to provide an amount of money back to policyholders to drivers to help them along the way,” Horgan said.

The province confirmed to CityNews that those who drive electric vehicles will also receive the rebate.

#BREAKING Premier John Horgan announcing ICBC will provide “one-time relief rebate of $110” — this is intended to provide relief to drivers as gas prices skyrocket after Russia’s invasion of Ukraine. #bcpoli

— Martin MacMahon (@martinmacmahon) March 25, 2022

When asked where the $110 and $165 figures came from, Minister for Public Safety Mike Farnworth says it had to do with ICBC’s financial situation due to “good financial management.”

“It’s about $395 to $400 million that would be available, and then recognizing that commercial vehicles are on the road more [and] have more expenses. And so the $110 and $165 was achieved on that basis, as a way of ensuring that everybody is treated equitably, but also recognizing from the commercial vehicle perspective, that they do have some higher … operating costs,” Farnworth said.

He credits stability in recent years with ICBC, which has allowed the crown corporation to “not only deal with the financial position that it was in, [but] to significantly move to rebuilding the capital reserves.”

“We were following this and tracking it to the last possible moment to give relief to drivers, but also to ensure that we were not putting the corporation back into the dumpster,” Horgan said.

No changes to taxes despite calls

Many have pointed out that B.C. drivers pay more at the pump than any other province, due to the high taxes, especially in the Metro Vancouver area.

Alberta’s premier announced the province would be temporarily dropping its gas tax, and the Quebec government will be dishing out $500 to everyone making less than $100,000 to manage inflation.

Horgan says the province chose to issue a rebate instead of lowering taxes as the taxes serve a vital purpose in funding services like transit and green initiatives. He also suggests it would lead to more expensive gas.

“We were reluctant and in fact, would not amend the taxation because it would just be filled by an increase in prices at the pump. And we saw that in Alberta where the government promised a 13-cent tax reduction on a Monday and on a Wednesday, the price went up 14 cents. We believe this is the best way to get money into people’s pockets,” he said.

The premier also responded to questions about why the money was not instead allocated to keeping transit costs down, after TransLink voted yesterday to raise fares 2.3 per cent.

He says TransLink and BC Transit are operating in public interest and the fare changes reflect that, adding not everyone has equal access to public transit across B.C.

“We had certainly loud heard loudly and clearly that there are many people who do not have the opportunity to avail themselves of a world class transit system as we have in our metropolitan areas. So this we felt was the best way to ensure that we could protect those drivers and also those who would have inflationary pressures brought to bear as a result of Vladimir Putin’s war in Europe.”

He pointed out that a tax decrease also wouldn’t benefit drivers who fuel up south of the border and says this way they also get a financial boost.

The premier cautioned that despite the optimistic outlook for ICBC’s finances, the province is far from immune to more global pressures in the days to come.

“We are not out of the woods yet. We are in for a series of a time of instability here in British Columbia and in Canada and indeed, around the world. And so we want to ensure that we’re able to respond. The Minister of Finance looked at this very carefully. Our processes, we didn’t act swiftly, as some will argue I’m sure… I can almost read the Liberal press release now — but we acted prudently. We made sure that we waited till near the end of the fiscal year so that ICBC could have a clearer picture of what their financial situation was,” Horgan said.

Rebate will do little to tackle rising price of everything,

affordability advocates say

The rebate is getting a lackluster reaction from affordability advocates on all ends of the pollical spectrum.

Jill Atkey with the BC Non-Profit Housing Association (BCNPHA) says the $395-million the province estimates this rebate will cost could be better spent towards tackling housing affordability, whereas the rebate will barely cover the cost of one tank of fuel.

“Quick rebates not targeted at those in need, those sorts of things virtually evaporate overnight and are forgotten by the next day, and I really think there’s so much more value for British Columbians that we could be getting out of investments like that,” she said, adding the money could see 3,400 affordable homes built.

“So that quick delivery of $400 million would help not just 3,400 families as those homes get built, but generations of families down the road for everybody who moves into those homes later.”

She feels the current provincial government has made “historic investments” into affordable housing, and should continue to focus on those most in need, including its promise to facilitate the purchase of market rental buildings into the non-profit sector.

“That’s where we would want to see much more targeted, meaningful, and purposeful investment than short, small, one-time rebates for every driver in the province regardless of their financial situation.”

Meanwhile, Kris Sims with the Canadian Taxpayer Federation thinks ICBC should be giving rebates if it runs a surplus.

“They should be running ICBC as close to level as possible,” she said. “It’s good that they’re giving back ICBC insurance holders their own money. They should do that anyway. But they also need to tackle the over taxation at the pump.”

She notes much of the cost of fuel is made up of provincial and federal taxes, and lowering or eliminating some would have a more long-term impact on the wallets of Canadians.

“Gasoline and diesel has become unaffordable for a lot of working people,” she said, acknowledging international events, such as the war in Ukraine, can affect the price of oil and at the pump. “So yes we need the rebate money, but also we need them to scrap these carbon taxes.”

BC Trucking Association welcomes rebate

“Any rebate that help with the increased cost of operating is certainly welcome. This is a step the government has taken and it’s a measured one and it’s going to help a little bit in the short term,” BCTA president Dave Earle said.

He notes the rebate will help smaller courier vehicles more than larger freight trucks, however it will still offer a little immediate relief.

“You’re sitting there trying to say ‘what can we do to help people today that are struggling with the cost of goods in the moment?’ And that longer-term investment, while it will pay dividends longer term, it doesn’t really get to that issue of the moment and of today,” he said.

Fuel is around 30 to 50 per cent of the trucking industry’s costs, and Earle says while the industry and governments should look at how to mitigate costs, it is also “at the mercy” of international markets and forces.

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