Liberal faux pas

In this blog, I sometimes can be quite critical of government – particularly when it comes to economic development. Today, I turn the gun on the opposition – namely, the Liberal Party of New Brunswick.

Today, I read a press release from the NB Liberals talking about a new study put out by the Consumers Association of Canada. Here’s an excerpt:

“This report confirms what New Brunswickers have been saying for years. We are paying too much. According to some industry experts, such as the New Brunswick Insurance Board and the Insurance Bureau of Canada, rates are falling. If they are in fact falling, they are not falling quickly enough especially in light of the record profits collected by insurance companies”, said Opposition Leader Shawn Graham (Lib – Kent). “We really need a public auto insurance system to rectify these inequalities.”

Now, this is a case of pure politics. The Liberal leader wants desperately to find ways to differentiate himself from the Premier. But while this strategy makes sense as no one really knows what makes him different, the auto insurance issue is a crazy one to pick.

What possible common sense rationale could there be for the Liberals to be championing the socialization of auto insurance? Under McKenna, the Liberals tried very hard to make the province ‘business friendly’ and create a positive climate for business investment. Now, the Liberals are threatening to socialize industry as a political gimic. The long term damage from this positioning is massive. Not just in the insurance sector, all the CEOs that pay any attention at all to New Brunswick will highly disapprove of this Liberal ploy.

Of course, the industry needed reform. Of course rates were spiralling out of control. But changes have been made and rates are dropping significantly. In fact, with the new round of cuts that are about to be approved by the New Brunswick Insurance Board, the average premium will be around $900 – lower than the average premium proposed by the Weir commission in their public insurance model?

And the Liberals relying on the Consumers’ Association of Canada study also reflects their willingness to use even bad data to prove their point. The CAC is a union-funded organization specifically targeting the auto insurance sector. They claim to be unbiased and consumer-focused but they don’t release the methodology behind their studies and they don’t release their source of funding. The CAC is about as credible as a private health care association releasing a study highlighting the merits of private health. It’s one side – but it certainly would never claim to be an unbiased.

Here is the CAC’s self-proclaimed mandate:
An independent, non-profit volunteer organization, represents and informs consumers and advocates action on their behalf to improve the quality of life.

They are not independent. If you get funding from a union that advocates for public insurance, how can you be independent?

Go to their webside They claim to have 10 issues areas from health care to the airline industry. However, when you click on these ‘areas’ the majority of them are empty or have one item. Auto insurance, however; has dozens of items. They are cloaking over a biased agenda under the brand of a ‘consumer advocate’.

If Shawn Graham, et. al. did any homework on their ‘source’, they would know this.

Shawn Graham is quick to hammer the New Brunswick Insurance Board but, unlike the CAC, they have the ‘actual’ numbers. They have unvarnished, untainted numbers. And they are enormously more credible than the CAC.

What does this have to do with economic development, you say? I’ll tell you what. We have a Tory government that has been almost completely disinterested in economic development for six years and that has led to the second worst job creation rate in Canada and a significant increase in our reliance on Equalization and other handouts. Now, we have the opposition threatening to socialize industries just for political gain. That, to me, is crazy. They will close the door to foreign investment if they start socializing industries – especially since the reforms that have been put in place are working by any objective standards.

Can you imagine Shawn Graham going to meet a CEO in Toronto after becoming Premier and socializing the insurance industry? “Hi, I’m Shawn Graham and I want you to set up your business in New Brunswick. I may end up socializing your industry for political gain but you should still come!”

By the way, in the interest of full disclosure, the firm I work for has done some consulting work for the insurance sector and that is why I know this file so well.

If the Liberals had any sense, if they wanted to be the party most open to attracting business investment, they would silence this nonsense and state unequivocally that they would only be for the ‘socializing’ of industries in only extraordinary situtions. They should state that their policy, should they form government, would be to work with the industry and bone fide consumer groups (the CAC exempted) to ensure a competitive market and an effective regulatory environment.