ICBC recently announced a new three-year deal for the towing industry: a compensation package consisting of a 6.7% increase for the first two years, and a 3% CPI increase for year three. While the announcement falls short of expectations, other structural changes will help move things forward in a positive direction.
There is bad news, but there is also some good news. It is all in how you slice it. ICBC has announced a new compensation deal for the towing industry, but before we get into the particulars of how this all breaks down, let’s first look at why this deal fails to bring industry up to an acceptable standard. The following graph below demonstrates the rate increases over the last 10 years.
The new three-year deal breaks down to an increase of three, three, and three—which would be good if the industry was not already so far behind. Since 2011, inflation has increased a staggering 25% (according to the Bank of Canada). As you can see in the graph above, industry rates on average have only increased 8%. So, while a rate increase is welcome news, in actual fact, it sets industry even further behind. Here is how the 6.7% breaks down:
- A 3% increase on towing rates for the first two years.
- A 3% increase for storage for the first two years.
- In year three, an increase of up to 3% CPI.
However, some good news has also come out of this recent announcement. This includes fundamental changes to the rate payment schedule itself—the CL332. The most significant of these changes is the elimination of the second tow rate. The first and second tow rate model was developed years ago. It was based on the assumption that each claim would have a minimum of three tows. It was a compensation model based on volume, which may have worked in its day, but it no longer serves anyone.
Another fundamental change is the creation of a billable line-item for dollies. This topic has long been on the liaison discussion table. The inclusion of dollies in the basic hook-up rate was implemented years ago, as far back as the 1980s, at a time when there was only about a 20% utilization rate. Fast forward to today, and dollies are now used up to 70% or more. With electric vehicles (EVs), it is 100%. The new rate payment schedule takes dollies out of the load and secure category (which was implemented in 2019), and creates a new line item for them on the CL332.
Another significant change is the recognition of the hazards involved in towing and storing electric vehicles. The electric vehicle market is increasing at an exponential rate, and governments and people all over the globe are transforming their transportation infrastructures. The B.C. government is committed to ensuring that by 2035, 100% of all new car sales will be electric, and thus the majority of cars on the road will soon be powered by electricity.
However, EVs are also new technology, and they create new hazards that operators must be concerned about. ICBC is committed to operator safety and has made several policy changes to compensate towers for the hazards that these vehicles may pose. The new rate payment schedule includes all 12-volt battery disconnects (which is standard for all EVs, ensuring the safety of the operator and others). This is billable under load and secure and is for badly damaged EVs that meet certain criteria in which ICBC will allow for triple the category storage rate.
Even further, ICBC will cover the cost for operator EV training for all its suppliers. This training is provided via the EVfriendly program.
The ARA represents your voice and your concerns through liaison meetings with ICBC. The liaisons are in place to ensure that industry gets the representation it needs, and it is important that ICBC receives the feedback that is generated from liaison discussions. It is important, therefore, that we continue our advocacy and raise your concerns, but equally, that you do your part by attending meetings, staying informed, and if possible, volunteer to become a part of the solution by joining the executive committee or the ICBC liaison committee.