‘We will not be held responsible’: Insurance company calls for review of $30 billion deal
The head of the national insurance agency says it will review the $30-billion deal between the provinces and the federal government to buy commercial insurance and will ask regulators to make a final call on whether to hold the province or the federal Crown corporation responsible.
“I want to make it very clear we will not and will not, as a result of the purchase of commercial insurance, be held accountable for any of the actions of this private company,” Peter MacKay said.
“The province and the government will be held fully accountable.”
MacKay was speaking in Regina on Monday after the provinces agreed to sell the Crown corporation to the private insurer, Cenovus, for $35.9 billion.
The province has already agreed to pay $12.4 billion.
“We’re looking at that purchase for the Crown,” MacKay told reporters on Monday.
“At the end of the day, the Crown will not get the taxpayer’s money, but the taxpayers will get their money.”
He said the Crown, which is owned by the provinces, would be responsible for paying all claims for the next five years.
“That means if the insurance company fails to pay claims in five years, then we’re going to have to pay a fine,” MacKaysaid.
“And we’ll be held to account for those losses.”
Under the deal, the provinces will buy up to $18.5 billion in commercial insurance for the province over the next three years, which will be paid by the federal crown corporation.
In addition to the Crown’s share of the cost, the federal treasury will pay about $1 billion in premiums.
The deal will also see the Crown sell off the Royal Canadian Mounted Police (RCMP) force and the Canadian Forces National Defence Force.
MacKay acknowledged the provinces are “going to be responsible” for any claims that come from Crown-owned businesses, and he said the government would be working with the provinces to set up a program to handle claims.
The provincial government says the sale is expected to create 20,000 jobs.
“This is not a bad deal, but I think it is fair to ask, and it is important to ask that question,” MacLaren said.
MacLary said the federal budget includes $5.4-billion for the CPPIB, and said the province was “not going to make the cuts” that are expected in the budget.
“It’s just not in the cards to be able to provide the jobs,” MacMackay said.
However, the provincial government said it would work with the federal finance minister to find savings.
The announcement came as the federal NDP called for an inquiry into the deal.
“In the interest of Canadians, the premier has taken the unprecedented step of announcing the creation of an independent, independent inquiry into a private insurance deal that will impact billions of dollars in provincial revenues,” NDP Leader Andrew Weaver said in a statement.
“If it isn’t too late, the NDP will put forward a detailed plan to address the $5-billion loss in Crown revenues and provide billions in investments to the provinces.”
In a separate statement, the government said that in the coming days it will begin releasing details of the financial information for the three-year deal with the Crown and the provincial finance department.
The NDP has also called on the federal Liberals to reject the deal as it does not go far enough.
“No government should be allowed to buy into an insurance company’s failure to pay its debts, and that includes the government,” NDP MP Megan Leslie said in the statement.
The provinces are now due to release the financials for the deal by July.
The federal government said last week it would be making a final decision about the deal in a few weeks.
“Our priority remains the continued success of the Crown business and the long-term prosperity of Ontario, which has already demonstrated it is prepared to work with us in a number of areas,” Finance Minister Charles Sousa said in Ottawa.