November 30, 2017
Cascades Casino
20393 Fraser Highway
LANGLEY, BRITISH COLUMBIA V3A 7N2
November 30, 2017
Mayfair Lakes Golf and Country Club
5460 No. 7 Road
Richmond, British Columbia

ICBC’s Position On The Federal Competition Act

June 26, 2012
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The issue: In early 2011, ICBC announced that the Corporation will no longer negotiate with trade associations or other industry representative groups on the rates it pays to suppliers due to recent changes to federal competition law.

Prior to this announcement, and ever since the inception of ICBC in 1973, these rates were established following intensive consultation with industry representatives. These representatives included trade associations, who were able to provide relevant data as input into determining fair and equitable rates of payment for services provided to ICBC. ICBC may be the only organization that has concluded that such activities contravene competition law.

In the last quarter of 2011, ICBC advised the ARA that, going forward, an independent, third-party company would be hired to gather input from industry to be used as criteria for establishing rates. The ARA was promised that, as a key stakeholder representative, the Association would participate in the process, and that we would be permitted to review the aggregated data once it was acquired.

While the ARA was offered the opportunity to provide input in the development and circulation of one such industry survey, the response to the first draft provided by the ARA appeared to be ignored, and the results of the survey were insufficient to permit any effective determination of rates by ICBC. The ARA has yet to be afforded an opportunity to provide any meaningful input into any other ICBC rate establishment processes.

Since January 2011, despite repeated attempts to obtain the information on which ICBC is basing its position on the issue of interpretation of the Competition Bureau opinion, the ARA’s questions remain unanswered. ICBC has steadfastly refused to produce the contents of the opinion it claims to have received from the Bureau.

The impact: The absence of meaningful industry input into decisions that affect it results in considerable frustration and ill will between the industry and ICBC, who is perceived by industry as abusing its position of market dominance.

ICBC rates must reflect a reasonable return to industry and the true nature of the cost of supplying services to ICBC. Industry must be able to sustain itself while investing in the technology and human resources required, which ultimately affects the ability to provide quality products and services to the satisfaction and safety of our mutual customers. Failure to do so has already, and will continue to, lead to business closures and lost jobs for British Columbians, which would be in keeping with ICBC’s opinion that there are too many retailers in the industry.

ARA position: As a Crown Corporation, ICBC must adhere to the highest standards of transparency and collaboration. It is not enough for ICBC to say they will be collaborative. They need to demonstrate this in a consistent and transparent manner.

  • The ARA is left with no alternative other than to continue to pursue a Provincial Freedom of Information application.
  • The ARA needs to understand how the means by which our Association provided industry data in the past (during the process of establishing fair and equitable rates) is incongruent with competition law.
  • ICBC’s overwhelmingly dominant position in the market place means that most companies have no choice but to do business with ICBC if they wish to remain in business at all. Therefore, even the slightest changes in ICBC policy can have significant impact on small businesses in B.C. To be fully aware of these impacts, and to minimize the hardship on industry, ICBC must consult with industry in a fair and transparent way before making changes to policy, procedures and remuneration.