The Fraser Institute

The Fraser Institute

October 03, 2011 06:32 ET

The Fraser Institute: Auto Insurance in Quebec Among Least Expensive in Canada While Ontario the Highest

TORONTO, ONTARIO--(Marketwire - Oct. 3, 2011) - While government-run auto insurance monopolies in BC, Saskatchewan, and Manitoba charge some of the highest auto insurance rates in Canada, Quebec consistently has the lowest premiums of any province with government-run insurance, concludes a new study released today by the Fraser Institute, Canada's leading public policy think tank.

The average auto insurance premium in Quebec was just $642 in 2009 (the most recent year for which data are available). Ontario had the highest average premium in 2009 at $1,281, followed by BC ($1,113), Saskatchewan ($1,049), and Manitoba ($1,027).

Of the remaining provinces, Prince Edward Island had the second lowest average premium after Quebec ($695), followed by New Brunswick ($728) then Nova Scotia ($736). Newfoundland & Labrador and Alberta each had an average premium of $749.

Neil Mohindra, director of the Fraser Institute's Centre for Financial Policy Studies and co-author of The Personal Cost and Affordability of Automobile Insurance in Canada, 2011 Edition, points out that Quebec's public monopoly is restricted to selling basic coverage only, while the private sector delivers 100 per cent of the optional auto insurance market. Additionally, Quebec has a pure "no-fault" system for bodily injuries, which does not allow injured parties to sue at-fault drivers for pain and suffering or additional costs. It also requires lower levels of coverage for bodily injury and third party liability than other provinces.

"Government-run auto insurance monopolies tend to be less efficient at providing auto insurance than a regulated, competitive market, and that's abundantly clear in BC, Saskatchewan, and Manitoba," said Filip Palda, Fraser Institute senior fellow and professor at the École nationale d'administration publique.

"Quebec scores well in affordability despite the presence of a government-run insurer. This is the result of limiting the monopoly to bodily injury coverage, less onerous regulation of premium rates, and lower mandatory coverage that provides consumers with more choice."

The report notes that premiums in Ontario are high because of higher claims costs per vehicle, a result of the high levels of insurance fraud and relatively severe regulations in rate-setting restrictions as well as mandatory minimum liability and accident benefits laws.

But the study also found evidence that taxpayers in Quebec, including non-drivers, are subsidizing the government auto insurer, the Société de l'assurance automobile du Québec (SAAQ). The SAAQ had accumulated a deficit of $2.6 billion by 2009, a cost equal to $417 per adult Quebec resident.

"Quebec taxpayers should be seeking accountability from the province's government-run auto insurer for its finances given how significant the long-term deficit is," Palda said.

The complete report is available at

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The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of 85 think-tanks. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit

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