Albertans may occasionally hear someone argue that the province should install a government-run monopoly to sell auto insurance. Eliminating choice and competition from the market, government-run insurers have a dismal record. There is a reason that no jurisdiction in North America has moved to create a public auto insurer in almost 50 years – they simply don’t work.
Read on to learn more about why government-run auto insurance would be a costly mistake for all Albertans, not just drivers.
A $3.5 billion price tag to taxpayers
Private sector job losses
A new auto insurance monopoly would also significantly enlarge the size and scope of the provincial government while dramatically reducing employment in the private sector.
Moving to a public auto system would put the government on the hook for massive job losses, affecting thousands of families in communities all across Alberta. This includes a significant impact on women who, according to Statistics Canada, make up the majority of employees in the insurance sector.
The Nous Group report estimates that the creation of a government-run auto insurance system would eliminate thousands of direct jobs at insurance companies, and cause additional losses for related sectors such as brokers and auto repair. This would be a significant job-killing action in the province and a major economic disruptor.
This runs counter to Alberta’s free market ideology and goal to support and promote private sector growth in the province.
The dismal financial track record of Canada’s government-run auto systems
- Saskatchewan’s 2023/2024 provincial budget highlights that the Saskatchewan Auto Fund is forecast to face a significant deficit of $125.5 million. This was equal to $129 per driver.
- The Insurance Corporation of British Columbia’s operating costs have now surpassed $2 billion2 in 2025/26—up more than $400 million, or 25%, since 2021/22. Costs are expected to rise even higher, reaching $2.17 billion by 2027/28.
- In Manitoba, Manitoba Public Insurance (MPI) is currently experiencing a financial deficit of $21 million, which is projected to rise to $24 million in 2024/25.
Loss of choice and discounts
Under government-run auto insurance systems, people lose the freedom to shop around for the best rate and product. They have to take what they get – at whatever price – from the government monopoly.
The Nous report notes that “transitioning to a public insurer will reduce consumer choice regarding their auto insurance provider. Consumers may have limited flexibility in selecting insurance coverage that best suits their needs and preferences, as there are fewer options available to them.”
In provinces with public auto systems, consumers also lose the ability to bundle home and auto policies to get premium discounts, or take advantage of the product innovations offered by private insurers, like online purchasing or the use of telematics.
This impacts not just auto insurance premiums. The majority of consumers buy property and automobile insurance from the same insurer, typically leading to discounts of at least 15% on both products. This means more than $200 in savings on a $1,500 home insurance policy.
The introduction of a government-run auto insurer could remove or limit Albertans’ ability to bundle policies for savings.
Public insurance runs counter to a free market
Government-run auto insurance is counter to Alberta’s free market economy, which acts as an economic engine of Canada.
Alberta’s private auto, home, and business insurers play a key role in supporting the provincial economy. Insurance protects the supply chains that support business and economic growth, and is there to in times of need to help people and businesses recover. Insurance also provides financial protection for Alberta families and businesses, providing peace of mind and promoting financial stability when disaster strikes.