Mike Davies, Editor-in-Chief Ω
An article published Sept. 26 in the Vancouver Sun proclaimed that the Insurance Corporation of British Columbia (ICBC) — the Crown corporation that provides auto insurance and vehicle operation licensing — “has been ranked the worst automotive insurer in the country – by its own customers.”
Is this seriously a surprise?
Picture, if you will, this hypothetical situation: you like McDonalds more than you like Wendy’s, A&W, Subway and all the other fast-food joints available as options. You prefer the products and prices at the iconic golden-arched establishment to those of its competitors.
But now picture a world in which Wendy’s, A&W, Subway and all other competitors didn’t exist. Would you still like McDonalds? Of course you wouldn’t. You’d say “that’s cheap, crappy food and terrible service,” because you have nothing to compare it to that would make it look good.
Now add to that picture the idea that McDonalds itself is the company that causes this lack of options for you. Would you maybe like it a bit less? Perhaps that level of dislike for its products and services becomes a situation of resentment, annoyance or anger?
Might you perhaps be less impressed with the constant cost-increases that would surely arise at Ronald’s eatery if it didn’t have to keep its prices down due to similar products being offered just down the street at competitive prices — especially if that company itself was causing such a monopoly to occur?
In an article from the free-market proponents, The Fraser Institute, the lack of competition with ICBC causes numerous problems, from the management structure of the organization itself right down to the products and services — and the cost of those products and services — that the consumer receives.
“Unlike private companies in competitive markets, government protected monopolies are not required to constantly innovate, compete for consumers, ensure efficient and effective staffing levels and pay, offer competitive prices and/or high quality services including more options,” according to the article released Sept. 18, 2012 by Mark Milke and Niels Veldhuis.
So in this hypothetical situation where McDonalds is the only fast-food option, it has been increasing the cost of its products (but not the quality of those products) and it doesn’t let any competitors enter the market to provide any comparison for the consumer.
Now picture the government (the owners of McDonalds in this hypothetical situation) making it illegal for you to eat food unless you periodically bought some food from McDonalds. (It is illegal to operate a motor vehicle in B.C. unless you purchase insurance for that vehicle and ICBC is the only provider.)
Now picture that the company in question is also supposed to be using its revenue to serve the public good (as Crown corporations are designed to do) but instead spends its revenue on huge severance and compensation packages.
Art Kirkner, who was hired in 2008 to cut costs at ICBC, was compensated $88,500 for the loss on the sale of his home in the United States; $18,780 for real estate commission; more than $13,000 for moving and storage; more than $10,000 for temporary accommodations, plus other expenses in 2010, according to documents obtained by CBC.
A total of $188,681 were filed as “expenses” compensated to Kirkner in 2010 on top of his salary and bonuses of over $315,000.
He “left” the corporation soon afterward and was given 12 months severance.
Would you maybe not be a huge fan of McDonalds if all these hypotheticals came true?
If you were the company in question, would you wonder why people’s opinion of you was so low?
I completely understand.
Personally, I want the option for my dinner to be a chicken sandwich from Wendy’s, a poutine from A&W and a box of Timbits for dessert.