The Unlikely Saint Bernard : IMC Maritimes

New Brunswick Premier Bernard Lord is no champion of social welfare. His commitment to business interests is as clear as that of his Liberal predecessor, Frank McKenna.

Is this recent age of deregulation and privatization, however, Lord may be temporarily hopping on a train that is moving in the opposite direction from that of his neoconservative colleagues.

Lord may soon choose to adopt a public auto insurance system in New Brunswick, as was recently recommended by a provincial legislative committee that was created to study the high-profile issue.

If he follows the suggested path, Lord will be among the first in Canada to engage in deprivatization, a bold act in today’s highly corporate political climate where public enterprise has fallen out of fashion and become stigmatized.

It is clear that Lord has not had an ideological epiphany. He is simply taking a cue from the electorate after they nearly booted him from office over this issue of car insurance in last year’s election. Tenaciously holding on to a one seat-majority in the legislature, Lord cannot afford to ignore the demands of the electorate.

Regardless of the apparent motive, the act acknowledges that there is still hope for public enterprise despite our heavily globalized economy. It may also act as a warning sign for governments bent upon relentless privatization.

Setting the tired rhetoric of the insurance industry aside, public auto insurance will clearly produce lower premiums for New Brunswickers. This result is mostly due to the difference in focus between private and public enterprise.

The foremost consideration of the private insurance company is to make a profit. According to the CBC, the profits earned by Canadian insurance companies in 2003 represented an increase of over 670 percent from the year before. These corporate profits come in the form of a significant mark-up added to the cost of an insurance premium. Collusion among insurance companies, whether explicit or buried in the “normal” functioning of the market, allows them to fleece consumers, who often have little choice but to pay the exorbitant rates.

Under a public insurance program the primary concern is providing insurance, not profit. Because the insurance program is run as a public service without any profit motive, the premiums must only be high enough so that the program can sustain itself. A private program, on the other hand, has to cover its costs and make a significant profit.

Although Lord will merely be attempting to appease his constituents, adopting a public auto insurance program will mean real savings for consumers. Just as important, however, will be the theoretical victory for those who argue against the ethos of privatization. Yet another example will exist showing that privatization does not inherently produce superior results, nor does it better serve the public. Privatizing public services guarantees but one thing – corporate profits, which should never become a priority over the public common good.