It may seem odd for Ontario NDP leader Howard Hampton to be advocating a public auto insurance for the province. After all, one of the signature moves of the NDP government led by Bob Rae (in whose cabinet Hampton sat) was its embarrassing about-face on this very issue.

Yet, last week saw Hampton, both in the Ontario legislature and in the editorial pages of the Toronto Star, forcefully and unapologetically advocating a policy that his party had once jettisoned in what turned out to be a futile attempt to remain aloft in the skies of public opinion.

When asked by reporters (and taunted by politicians from other parties) about the NDP&#0146s credibility on the issue, Hampton made the most obvious break that he has made to date with the policies of the Rae government.

He argued that he could advocate public auto insurance now because he had concluded that &#0147Bob Rae was wrong.&#0148

As someone who believes that, on balance, the Rae years saw more positive changes than negative ones, I have to agree with the assessment that folding on this particular issue was a terrible mistake.

Hampton is clearly calculating that the time is ripe to revisit this issue and that he should do so forcefully.

Even a few months ago, auto insurance just wasn’t on the political radar &#0151 for any party. The party&#0146s &#0147publicpower&#0148 platform doesn’t even mention the issue (although advocating public auto insurance is clearly compatible with the platform&#0146s theme of citizen empowerment).

Then again, the Common Sense Revolution didn’t mention abolishing employment equity (or in Tory speak &#0147scrapping job killing race-based quotas&#0148) either. The issue emerged only after the document went to print and the Harrisites identified it as a &#0147wedge issue&#0148 to distinguish themselves from the Blue Lite being offered by Lyn McLeod.

Similarly, auto insurance became an issue in the past six months and that took a lot of politicians by surprise (Bernard Lord, come on down&literally).

Car insurance rates in the provinces with public systems &#0151 Manitoba, Saskatchewan, British Columbia and, to some extent, Quebec &#0151 have always been significantly lower than those that leave rates up to the private insurers. That&#0146s why right-wing governments in those provinces, including the current &#0147Liberal&#0148 government of B.C. Premier Gordon Campbell, haven’t dared to touch the public plans in their province.

The gap grew even more obvious over the past year. Statistics Canada reports that, across Canada, premium increases averaged 26.3 per cent.

Only in the provinces where the private sector played no role did increases stay below ten per cent, ranging between 0.1 per cent in Manitoba to 9.5 per cent in Saskatchewan. Contrast those numbers with the 50.1 per increase in Alberta, the 27.7 per cent increase in Ontario or the more than 50 per cent increase in the four Atlantic provinces, and it&#0146s easy to see why people are hungry for alternatives.

In New Brunswick and Nova Scotia, even the Tories are saying that public auto insurance may be the best option, while the Liberals are desperately trying to associate themselves with an NDP idea.

Hampton contends that out-of-control premiums have little to do with the cost of paying out claims. The real explanation for the obscene rise in auto insurance costs can be found in the returns insurance companies received on their investments in stocks, bonds and other financial instruments.

In the 1997-2000 period, investment income from these sources averaged just under nine per cent annually. By 2002, investment income for the industry had declined to just over two per cent. In other words, over the past two years Ontario drivers and other insurance policyholders have had to make up for the decline in “Big Insurance’s” investment income resulting from a bad stock market.

Public auto insurers invest more in stable municipal and school bonds and less in the volatile stock market. Public auto uses profits to increase driver benefits, reduce premiums and absorb losses rather than distribute these profits as dividends to shareholders.

“For fifteen years I’ve watched three governments try to regulate the private auto insurance industry,” MPP Peter Kormos argued, in challenging Finance Minister Janet Ecker with the hyperbole for which he is known. “You still haven’t learned. It&#0146s a monster that can’t be caged; it’s a beast that can’t be tamed. It’s a mad dog that can’t be leashed. When are you going to understand that you can’t regulate the private auto insurance industry? Even private insurers admit that Canada’s best-working systems are Manitoba&#0146s public auto and Quebec’s public auto. Why don’t you stand up today and say that public auto insurance works for British Columbia, Saskatchewan and Manitoba, and if you’re going to provide fairness for drivers and innocent victims, you want to make it work in Ontario?”

It&#0146s a question that begs to be answered seriously. Perhaps the upcoming election campaign will be about ideas, after all.

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Scott Piatkowski

Scott Piatkowski is a former columnist for rabble.ca. He wrote a weekly column for 13 years that appeared in the Waterloo Chronicle, the Woolwich Observer and ECHO Weekly. He has also written for Straight...