In a pre-campaign promise, the Saskatchewan NDP says it will lower auto insurance premiums for drivers while offering them a $100 rebate if its party forms government this fall.
Leader Ryan Meili made the promise on Thursday, saying premiums would be lowered by seven per cent, or $85 a year.
Meili said the money would come from Saskatchewan Government Insurance’s (SGI) $1-billion reserve fund.
“This has been a difficult year for so many Saskatchewan families. But even before the pandemic, people were feeling stretched and stressed and finding it harder to make ends meet,” Meili said.
“We have the fiscal capacity right now to make life a bit more affordable. This is money that’s more useful in people’s pockets than it is sitting in a massive reserve fund.”
According to SGI’s first quarter report released in August, their Rate Stabilization Reserve (RSR) contains over $1 billion. Over $220 million has been added to the RSR this year, according to the report.
This is where Meili says the money to cover the proposed rate reduction and rebate would come from.
A spokesperson for the premier’s office said the NDP’s promise serves as political bribery.
“The NDP’s plan to use the SGI RSR as an election slush fund would plunge Saskatchewan almost $400 million further into deficit over the next four years,” said spokesperson Jim Billington.
According to the government, it would cost $115-million should SGI rebate each Saskatchewan driver with a $100 cheque.
Additionally, a seven per cent premium reduction would result in a $70-million annual decrease in revenues to SGI, or $280-million over four years.
Billington says the NDP’s plan would increase the province’s deficit more than what is currently projected.
In August, the Saskatchewan Party government announced it is planning on running a deficit for the next three years as it bounces back from the economic turmoil of the coronavirus pandemic.
“Under the budgeting standards put forward by the provincial auditor, Saskatchewan’s budget is prepared on a summary financial basis,” Billington said.
“This means that all revenues, assets, funds, liabilities and expenses incurred by government and government owned entities, including SGI, impact the provincial budget.”
Thursday’s campaign promise made by the Saskatchewan NDP is the party’s second in less than a week.
Saskatchewan’s 28th general election is on Oct. 26.
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