Manitoba has publicly-owned auto insurance. If you insure a vehicle in Manitoba, you have to buy from the monopoly.

The argument is that a government agency that doesn’t work for profit (but must still be profitable!), insures everyone who wants insurance, and only marginally penalizes those with poor driving records (and marginally rewards those with good driving records) is better for Manitobans than private, for-profit companies who carefully select their risks and base all premiums on risk. The attitude is that auto insurance is a basic essential. Since it is an essential, it must be provided by and run by government.

I find it difficult to understand how auto insurance is now equal to food, clothing, and shelter.

Citizens are concerned about soaring auto insurance costs. The recent New Brunswick provincial election put it into high priority and prompted the government there to look at Manitoba’s public system (but later rejected it). Even Alberta’s Ralph Klein introduced quasi-no-fault legislation that has some traces of Manitoba’s plan. If Alberta’s plan works, it is predicted that New Brunswick will follow that new plan and Manitoba will, once again, be forced to justify its monopolistic attitude.

The reality for auto insurance is that there isn’t a government system in existence that can keep costs satisfactorily reasonable. Manitoba chooses to spread the risk and subsidize poor drivers. Private insurer provinces choose to select the risk and reward good drivers.

D’Arcy Barker is a Chartered Financial Planner and Registered Employee Benefits Consultant- www.barkermoney.com

E-mail: ReduceYourTaxes@barkermoney.com