2024 Fall Economic Statement: Little progress on insurance promises
The Federal Government’s Fall Economic Statement is its most recent update on what it’s doing to support the Canadian economy. The 270-page document lays out the current state of the economy, and contains dozens of new and ongoing government programs.
While the Fall Economic Statement has much to offer Canadians, it doesn’t have much to say about insurance. And while we continue to pay higher and higher premiums, the government’s slight few interventions are unlikely to amount to any actual relief.
Here’s an overview of what the Fall Economic Statement has to say about insurance, and why Canadians can expect to continue paying more.
Also read: Canada’s 2024 Fall Economic Statement: What you should know
Flood insurance program left high and dry
A continuing problem for many Canadians is lack of access to flood insurance due to high risk. According to IBC, 1.5-million Canadian households are unable to get flood insurance, leaving them vulnerable to literal rising water.
Those who can get coverage are paying more – numbers from Statistics Canada show the average home insurance premium has risen 6.5% since this time last year. And the rate of climate-related disasters is only increasing. The IBC says the insurance industry paid out $4-billion due to floods this summer, compared with $5-billion over the preceding nine years.
The government first promised to develop a flood insurance program for high risk households back in 2023, but the Fall Economic Statement essentially says that won’t be happening. The government says details will be announced in the 2025 budget, but a looming election puts that in doubt.
While the private insurance industry claims to be doing its part, it won’t likely be able to open up coverage to more households without government support.
Auto theft crackdown stalls
Rising car insurance costs are costing Canadians big, driven jointly by inflation and the surge in auto theft. But the Fall Economic Statement offers little relief to drivers.
According to the IBC, Canadians made insurance claims totalling $1.5-billion for stolen vehicles in 2023. The rate of theft decreased by 19% in the first half of 2024, but IBC vice-president Liam McGuinty says “the problem remains significantly above historical trends.” As a result, the IBC estimates the average Ontario driver is paying $130 more per year for car insurance.
Also read: The top stolen vehicles in Canada
In its Fall Economic Statement, the government is quick to take credit for the recent dip in thefts; it points out a recent $43-million investment as evidence. But it offers no continuing action aside from a promise to grant the Canadian Border Services Agency (CBSA) additional powers to inspect goods destined for export. The proposed legislation would ostensibly discourage auto theft by intercepting more stolen vehicles as they depart the country, but is unlikely to be introduced prior to an election.
Life insurance left out
While inflation is now under control – the Fall Economic Statement says it’s been within its target range all year – many Canadians are still concerned about whether they have enough life insurance to meet their families’ needs. After years of rapid price increases, many fear their death benefit will no longer have enough buying power to support their beneficiaries.
Recent changes to the capital gains tax, which will leave estates owing more, has also created life insurance problems for many families. Those using life insurance to pay for capital gains tax on valuable assets like family cottages are having to increase their contributions to avoid losing them to the tax man.
Unfortunately, the Fall Economic Statement offers nothing to those looking for relief when it comes to life insurance. Canadians will continue to shoulder their own increasing expenses with no relief in sight.
The bottom line
The 2024 Fall Economic Statement doesn’t do much to help Canadians struggling with rising insurance costs. Whether it’s flood, auto, or life insurance, the government’s lack of action means we’re left to keep paying more out of pocket. For now, it seems relief is still a long way off.