Alberta’s new “Care-First” auto insurance model is being promoted as a pathway to long-term affordability, but industry experts said the numbers don’t yet add up, according to a report from the Edmonton Journal.
The province has released a report outlining the benefits drivers could receive after a collision and the limited circumstances under which lawsuits will still be permitted. Missing from the update was a key selling point from last November, when officials claimed the reforms could save drivers up to $400 annually.
Marisa Breeze, press secretary to the finance minister, said those earlier projections were based on June 2023 industry data and have been eroded by inflation, catastrophic loss events, and geopolitical pressures. The largest cost driver, she added, remains bodily injury claims, which the new system aims to reduce.
Alberta drivers currently pay the second-highest auto premiums in Canada, averaging $1,703, behind only Ontario at $1,970. While the Insurance Bureau of Canada (IBC) says the reforms could improve claims predictability and reduce legal disputes, it warns that higher benefits may still push premiums higher.
“If we’re going to have richer benefits, there’s going to be a greater cost,” said Aaron Sutherland (pictured), IBC vice-president. “It’s hard for us to see how there will be savings just on this current trajectory.”
The model, set to take effect Jan. 1, 2027, will limit lawsuits to certain cases, such as when a driver is convicted of a criminal offence or when out-of-pocket expenses exceed policy benefits. The government argues that reduced litigation could stabilize liability premiums, but personal injury lawyers warn the shift will undermine accountability, the report said.
“There’s a reason there are lawyers in the system — to keep wrongdoers honest,” said Mark McCourt of McCourt Law Offices. “With lawyers out of the picture, insurers will be able to act with impunity.” McCourt estimates the change could wipe out 99% of injury law revenues in the province.
Critics also say benefit figures in the report may overstate real-world payouts.
“People get lured in by big numbers,” said Fred Litwiniuk of Litco Legal. “The question is, where’s that money going to come from if insurers are already pleading poverty?”
Alberta NDP affordability critic Sharif Haji said the government has yet to show how the model will actually lower costs. “It doesn’t provide any substantive way to see how much premiums will go down,” he said.
