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Welcome to the new reform of auto insurance in Ontario

by

Hubert Roy

November 19, 2018 11:30

Photo : Freepik

The recent economic update from the government of ontario has been much ink seen cuts in services to the francophone community. Measures also affect the insurance, found the Journal of the insurance.

The main key automobile insurance in Ontario. The plan of the place will undergo a new revision. TheAuthority of ontario’s financial services regulation, the regulator that will oversee from now on the financial arrangements of the province, will have to find ways to reduce the costs in motor insurance. It will examine in particular how the rates for insurance are regulated.

The government also indicates that the new Authority will have to consider what is done in other provinces. The purpose of this approach ? Generate greater efficiencies, but also introduce more competition into the system.

The insurance Bureau of Canada (IBC) congratulated the government of Doug Ford for that ad. Its intention to modernize the way to price car insurance premiums has received particular attention in the update tabled by the minister of Finance Victor Fedeli.

Innovations

Colm Holmes, CEO ofAviva Canada, said that she also satisfied the intentions of the government. In addition to the measures aimed at bringing more transparency in the market and lower premiums, it is the announcement that a framework for the introduction of new advanced.es in this market, which enables him to see positively the intentions of the government of ontario.

The conservative Party of the place thus intends to introduce rules that will allow Ontarians to contract the insurance in line, use of telematics and to use electronic proof of auto insurance. “We want to work closely and actively with the government, said Mr. Holmes, in order to reward good drivers with good coverage and the best service, at a cost that is reasonable. “

The issue of passive investments

The ontario government has also announced that it will not respond to changes made by the federal government, so that SMES earning more than $ 50,000 in investment income liabilities per year will be taxed at the same rate as large companies. This decision enchants the canadian Federation of independent business (CFIB).

The agency directed all the provinces to do the same. The conservative government newly in office in New Brunswick also intends to do the same.

“With the future increases in contributions to the Canada pension Plan and the imposition of a carbon tax in several provinces, the tax burden coming from the federal weighs more heavily on SMES. Therefore, it is desirable that the provinces take steps to ensure that all SMES continue to benefit from the provincial tax rate reduced, ” said Martine Hébert, senior vice-president and national spokesperson for CFIB.

According to the CFIB, under the new federal rules on income from passive investments, some of the SMES that hold passive investments will not qualify for the federal income tax rate of 9 % and will be taxed at the same rate as large companies, or 15 %. If the provinces follow the example of Ottawa, the SMES also will lose their access to the provincial tax rate reduced, ” says the organization.

“You should know that many heads of SMES use their investment income to keep their business afloat in the event of an economic downturn or to invest in expansion projects and, even, to save for retirement. When we know that many SMES will find themselves more heavily taxed because of their income from passive investments, the decision of the Ontario appears to us to be about, ” says Ms. Hébert.

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