Ford government announces cuts to some mandatory auto insurance coverage — and offers millions for new police helicopters

“We’re going to allow consumers to have more convenience and choice,” Finance Minister Peter Bethlenfalvy told a news conference Tuesday. “We want insurance to be affordable.”

Bethlenfalvy suggested that making fewer coverages mandatory will make insurance premiums cheaper, but said he didn’t have a specific estimate for how much the changes would save consumers.

According to the budget document, medical, rehabilitation and attendant care benefits will still be mandatory, while all other accident benefits — including income replacement, death benefits, and funeral benefits — would become optional.

Opposition politicians slammed the proposed insurance changes, arguing that they could leave people vulnerable to significant costs, and probably wouldn’t make premiums any more affordable.

“We’ve seen them try this before, and premiums went up,” NDP Leader Marit Stiles said at a news conference.

Green Party Leader Mike Schreiner also doubted the changes will help consumers.

“These changes aren’t going to do what they think they will,” said Schreiner. 

“When people need that coverage further down the line when there’s an accident, this will leave them more vulnerable,” he added.

NDP finance critic Catherine Fife said a better way to cut insurance premiums would be to have the Financial Services Regulatory Authority (FSRA) enforce a five per cent profit margin on insurance companies. Right now, Fife said, those profits range from 15 to 33 per cent.

“I’d have the FSRA do their job,” said Fife, adding that the insurance companies could afford to have lower profit margins.

“The insurance companies are doing all right,” Fife said.

Wilfrid Laurier University finance professor Mary Kelly said the change is  likely to hurt lower income Ontarians or others who don’t have alternative health coverage through work.

“The people most likely to not take the optional coverage are the ones who need it the most,” said Kelly, who specializes in the insurance industry.

Kelly also panned a proposal in the budget calling for people to use their auto insurance for accident-related health claims before using other extended health insurance plans, such as those at work.

“That’s going to make auto insurance premiums go up,” said Kelly.

A senior executive at insurance company Aviva praised the changes.

“The Ontario Budget is a good start towards giving drivers more control over their auto insurance by selecting coverage that best suits them. Aviva Canada applauds the government’s leadership for being the first province in Canada to take a consumer- oriented approach that delivers meaningful choice,” said Susan Penwarden, managing director, Aviva Canada.

Bethlenfalvy said the help for police forces should also eventually help keep insurance premiums come down.

In 2023, there were more than 30,000 cars stolen across Ontario, an increase of 7.1 per cent from the previous year. According to a study from Equite, an insurance industry association, insurers paid out more than $1 billion in stolen car claims across Canada in 2023.

The helicopters, said Bethlenfalvy, should help cut down on theft.

“These helicopters will help police crack down on auto theft, as well as street racing, carjacking and impaired driving, while assisting in apprehending violent criminals and locating missing persons,” he said in his speech presenting the budget to the legislature.

Finance ministry sources said the crackdown on auto theft should also eventually help with insurance premiums.