By Martin Ouellet
QUEBEC (CP) _ While other provinces have taken steps to reduce
soaring private automobile insurance rates, Quebec's cash-strapped
public auto insurance agency has been given the green light to go
ahead with a series of rate hikes.
A council of experts appointed by the province supports the rate
hikes proposed earlier this year by the Societe de l'assurance
automobile du Quebec.
``It's necessary to re-establish financial equilibrium and the
longer we wait, the greater the risk that a deficit will accumulate
and who's going to pay for that? Future generations,'' said Michel
Sanschagrin, president of the council, said Wednesday.
In their 56-page report released Wednesday, the experts support
the gradual rate increases aimed at balancing the society's books by
Over the next three years, Quebecers should expect a 60 per cent
increase in the cost of a driver's licence and automobile
registration, from $178 to $204 for the licence and $130 to $144 for
Fees for certain models of sport motorcycles will jump by more
than 400 per cent, from about $276 for both licence and registration
this year to $610 next year, and finally, in 2009, to $1,321.
Sanschagrin said most automobile categories will not see such a
``There is one category, I won't hide it, that of sport
motorbikes, where the increase is significant,'' he said.
But Sanschagrin said that the same kind of motorcycles would cost
$13,000 to insure across the border in Ontario.
The report also supports a $10 fee on auto insurance beginning
next year and climbing to $20 in 2008 and $30 in 2009, to help the
provincial agency pay down its current debt.
Under the expert proposals, the SAAQ's annual deficit would drop
from $500 million today to $315 million by 2009.
Sanschagrin said rates haven't changed in 20 years.
The SAAQ has been in a spending deficit since 1982 and this year
expects to take in $700 million while paying out $1.2 billion, he
The society's board of directors will make the final decision on
any rate changes.
A couple of years ago provinces were scrambling to deal with
skyrocketing private insurance costs after the issue nearly toppled
the New Brunswick government.
Most Atlantic provinces and Alberta passed legislation mandating
some form of rate reductions.